DCIT,Circle-1, Kolkata, Kolkata V. M/s. Winro Commercial India Ltd, Kolkata

ITA 543/KOL/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7938 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2012
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 09-08-2012
• Court: TRIBUNAL
• Department Lawyers: K K DAS
• Assessee Lawyers: A K TIBREWAL
• Section: 143(3); 115JB; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND ! ! ! ! , '# ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SANJAY ARORA, AM] $ $ $ $ / I.T.A NO. 543/KOL/2012 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2007-08 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. WINRO COMMERCIAL INDIA LTD. CIRCLE-1, KOLKATA. (PAN: AAACW 2748 Q) (*+ /APPELLANT ) (,-*+/ RESPONDENT ) FOR THE APPELLANT: SHRI K. K. DAS FOR THE RESPONDENT: SHRI A. K. TIBREWAL DATE OF HEARING: 07.08.2012 DATE OF PRONOUNCEMENT: 07.08.2012 '. / ORDER IMMEDIATELY UPON CONCLUSION OF HEARING OF THIS APPE AL ON 7 TH AUGUST, 2012, THE BENCH PASSED THE FOLLOWING ORDER: 7 TH AUGUST, 2012 DELAY CONDONED. APPEAL OF REVENUE IS DISMISSED. D ETAILED ORDER WILL FOLLOW. ORDER PRONOUNCED IN OPEN COURT. PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-I, KOLKATA IN APPEAL NO. 458/CIT(A)-I/CIR-1/09-10 DATED 01.01.2012. ASSESSME NT WAS FRAMED BY ADDL. CIT, RANGE-1, KOLKATA U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HE REINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007-08 VIDE HIS ORDER DATED 30.12 .2009. 2. THIS APPEAL OF REVENUE IS DELAYED BY 6 DAYS. RE VENUE HAS FILED CONDONATION PETITION STATING THE REASON AS UNDER: 3.4.2012 : LD. CIT, KOL-1, KOLKATA AUTHORIZES FO R FILING OF 2 ND APPEAL BEFORE ITAT 4.4.2012 : APPROVAL FOR FILING OF 2 ND APPEAL COMMUNICATED BY THE OFFICE OF CIT, KOL- 1, KOLKATA TO THIS OFFICE 4.4.2012 : PREPARATION OF PAPERS 5.4.2012 : HOLIDAY (MAHAVIR JAYANTI) 6.4.2012 : HOLIDAY (GOOD FRIDAY) 7.4.2012 : HOLIDAY (SATURDAY) 8.4.2012 : HOLIDAY (SUNDAY) 9.4.2012 : SUBMITTED TO THE OFFICE OF CIT, KOL-1, KOLKATA FOR FILING OF APPEAL. LD. AR HAS CONCEDED THE POSITION AND DID NOT RAISE ANY OBJECTION FOR CONDONATION OF DELAY. HENCE, THE DELAY OF 6 DAYS IS CONDONED AND APPEAL I S ADMITTED. 2 ITA 543/K/2012 WINRO COMMERCIAL INDIA LTD. A.Y. 07-08 3. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AG AINST THE ORDER OF CIT(A) IN ALLOWING REBATE U/S. 88E ON INCOME FROM SECURITIES WHILE COM PUTING TAX U/S. 115JB OF THE ACT. FOR THIS, REVENUE HAS RAISED FOLLOWING TWO GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE BY DIRECTING TH E AO TO GRANT REBATE U/S. 88E ON THE INCOME FROM SECURITIES TRANSACTIONS. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE BY DIRECTING THE AO TO G RANT REBATE U/S. 88E WHILE COMPUTING TAX AS PER SECTION 115JB OF THE I. T. ACT, 1961. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS DENIED REBATE U/S. 88E OF THE ACT ON INCOME FROM SECURITY TRANSACTIONS WHILE COMP UTING INCOME U/S. 115JB OF THE ACT. AO WAS OF THE VIEW THAT THIS REBATE U/S. 88E OF THE AC T IS NOT AVAILABLE ON TAX PAYABLE ON BOOK PROFIT BUT IT IS AVAILABLE ONLY ON COMPUTATION OF T OTAL INCOME UNDER NORMAL PROVISIONS. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO FOLLOWING THE CASE LAW OF HONBLE ITAT, BANGLORE BNCH IN THE CASE OF HORIZON CAPITAL LTD. VS. ITO IN ITA NO.592(BNG)/10 DATED 16.7.2010 ALLOWED THE CLAIM OF ASSESSEE. AG GRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 5. WE FIND THAT THE ASSESSEE CLAIMED REBATE U/S. 88 E OF THE ACT AT RS.35,79,246/- BEING AMOUNT OF SECURITY TRANSACTION TAX IN PROPORTION OF ITS INCOME FROM BUSINESS ON WHICH IT HAD PAID SECURITY TRANSACTION TAX TO ITS TOTAL INCOME. WE FURTHER FIND THAT ASSESSEES INCOME FROM BUSINESS IS ITS POSITIVE INCOME ON WHICH ASSESSEE H AS PAID SECURITY TRANSACTION TAX. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF TH E ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF HONBLE ITAT, BANGLORE BENCH IN THE CAS E OF HORIZON CAPITAL LTD., SUPRA, WHEREIN THE TRIBUNAL HAS HELD AS UNDER: WE FIND THAT ONLY ISSUE BEFORE US IS THAT WHETHER R EBATE WILL BE ALLOWED U/S. 88E OF THE ACT WHILE COMPUTING TOTAL INCOME U/S. 115JB OF THE ACT. WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE DECI SION OF ITAT BANGALORE A BENCH IN THE CASE OF M/S. HORIZON CAPITAL LIMITED VS. ITO IN ITA NO.592(BNG)/10 DATED 16.7.2010, WHEREIN IT IS HELD AS UNDER: 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE RIVAL CONTENTIONS, WE FIND THAT THE ONLY DISPUTE IS WHETH ER THE REBATE OF STT PAID BY THE ASSESSEE IS ALLOWABLE FROM THE INCOME TAX CO MPUTED AGAINST THE TOTAL INCOME COMPUTED UNDER SECTION 115JB OF THE INCOME T AX ACT, 1961. THE TERM TOTAL INCOME HAS BEEN DEFINED UNDER THE INCO ME TAX ACT, 1961 AS THE TOTAL AMOUNT OF INCOME REFERRED TO IN SECTION 5, COMPUTED IN THE MANNER LAID DOWN IN THIS ACT. SECTION 5 OF THE INC OME TAX ACT, 1961 DEFINES THE SCOPE OF THE TOTAL INCOME OF A RESIDENT OR A NON-RESIDENT PERSON. THE TOTAL INCOME OF THE ASSESSEE HAS TO BE COMPUTED UNDER THE REGULAR 3 ITA 543/K/2012 WINRO COMMERCIAL INDIA LTD. A.Y. 07-08 PROVISIONS OF THE INCOME TAX ACT, 1961 AND IN THE C ASE OF A COMPANY IT CAN BE ARRIVED AT BOTH UNDER THE REGULAR PROVISIONS OF THE INCOME TAX ACT AND UNDER THE DEEMING PROVISION UNDER SECTION 1 15JB OF THE ACT. IT HAS BEEN PROVIDED THAT WHERE THE INCOME TAX PAYABLE BY THE A SSESSEE ON THE TOTAL INCOME COMPUTED UNDER REGULAR PROVISIONS OF THE ACT IS LESS THAN 7 % OF THE BOOK PROFIT PREPARED IN ACCORDANCE WITH THE COM PANIES ACT, THE HIGHER OF THE TAX I.E. THE BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AND TAX PAYABLE BY THE ASSESSEE SHALL BE T HE AMOUNT OF INCOME TAX AT THE SPECIFIED RATE. WHEN WE LOOK AT THE PROVISIO NS OF SECTION 87 OF THE INCOME TAX ACT, 1961, WE FIND THAT THE REBATE IS TO BE GRANTED FROM THE AMOUNT OF INCOME TAX CHARGEABLE ON THE TOTAL INCOME OF THE ASSESSEE. THE INCOME TAX IS COMPUTED AFTER ARRIVING AT THE TOTAL INCOME OF THE ASSESSEE AND SECTION 87 OF THE INCOME TAX ACT, 1961 DOES NOT DIFFERENTIATE BETWEEN THE TOTAL INCOME COMPUTED UNDER THE REGULAR PROVISI ONS OF THE ACT OR UNDER SECTION 11 5JB OF THE INCOME TAX ACT, 1961. EVEN TH OUGH THE SUB SECTION (1) OF SECTION 115JB STARTS WITH THE NON-ABSTANTE CLAUS E, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS A CT, WE FIND THAT IT IS ONLY FOR THE COMPUTATION OF THE TOTAL INCOME AND THE SUB SECTION (5) OF SECTION 115JB PROVIDES FOR A SAVING CLAUSE THAT THE REST OF THE PROVISIONS OF THE INCOME TAX ACT RELATING TO DEDUCTIONS, REBATE, ETC THE OTHER PROVISIONS OF THE INCOME TAX ACT SHALL APPLY. THEREFORE IT IS CLEAR T HAT THE PROVISION OF SECTIONS 87 AND 88A TO 88E ALSO APPLY AFTER THE TOT AL INCOME IS COMPUTED UNDER SECTION 115JB OF THE INCOME TAX ACT, 1961 AND SINCE THE ASSESSEES TOTAL INCOME INCLUDES THE INCOME FROM THE TAXABLE S ECURITIES TRANSACTIONS, THE ASSESSEE IS ENTITLED TO A DEDUCTION OF THE AMOU NT EQUAL TO THE SIT PAID BY HIM IN RESPECT OF THE TAXABLE SECURITIES TRANSACTIO NS ENTERED INTO IN THE COURSE OF BUSINESS DURING THE PREVIOUS YEAR. THE AS SESSEES APPEAL IS THUS ALLOWED AND THE ASSESSING OFFICER IS DIRECTED TO GI VE REBATE UNDER SECTION 88E FOR THE STT PAID BY THE ASSESSEE. IN VIEW OF THE ABOVE, WE FIND THAT REBATE U/S. 88E IS TO BE ALLOWED FROM THE TOTAL INCOME, WHETHER THAT IS COMPUTED U/S. 115JB OF THE ACT OR UNDER NORMAL PROVISIONS OF THE ACT. ACCORDINGLY, WE FIND NO INFIRMITY IN T HE ORDER OF CIT(A) AND THIS ISSUE OF THE REVENUES APPEAL IS DISMISSED. AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE A SSESSEE, RESPECTFULLY FOLLOWING THE BANGLORE BENCH DECISION IN THE CASE OF HORIZON CAPITAL LTD. SUPRA, WE CONFIRM THE ORDER OF CIT(A) ALLOWING THE CLAIM OF ASSESSEE. APPEAL OF REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 7. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- ! ! ! ! , '# , (SANJAY ARORA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( /# /# /# /#) )) ) DATED: 7TH AUGUST, 2012 01 %2 3 JD.(SR.P.S.) 4 ITA 543/K/2012 WINRO COMMERCIAL INDIA LTD. A.Y. 07-08 '. 4 ,5 6'5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT DCIT, CIRCLE-1, KOLKATA. 2 ,-*+ / RESPONDENT M/S. WINRO COMMERCIAL INDIA LTD., 15, C. R. AVENUE, KOLKATA-700 072. 3 . .% ( )/ THE CIT(A), KOLKATA 4. .% / CIT, KOLKATA. 5 . >? ,% / DR, KOLKATA BENCHES, KOLKATA -5 ,/ TRUE COPY, '.%@/ BY ORDER, /ASSTT. REGISTRAR .