ASST CIT 4(3), MUMBAI V. JMP SECURITIES P.LTD, MUMBAI

ITA 5824/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88388 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2015
• Appeal Filed By: Department
• Bench Allotted: J
• Assessment Year: 2007-2008
• Appeal Filed On: 27-09-2013
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Reassessment proceedings
• Section: 143(3); 115JB; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.5824/MUM/2013 ASSESSMENT YEAR: -2007-08 ACIT 4(3), 6 TH FLOOR, ROOM NO. 649, AAYAKAR BHAVAN, MUMBAI 20. VS.` M/S JMP SECURITIES P. LTD. 104/105-B, MAHARASHTRA CHAMBER OF COMMERCE KALAGHODA, MUMBAI 400023. PAN:- AAACJ8850C APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 15.07.2013 OF CIT (A) FOR A.Y. 2007-08. THE REVENUE HAS RAISE D FOLLOWING GROUND:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO ALLOW T O THE ASSESSEE, THE REBATE U/S 88E WHEN TAX LIABILITY WAS DETERMINED U/S. 115JB OF TH E INCOME TAX ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE IMPUGNED ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW AND CONSEQUENT LY MERITS TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. REVENUE BY SHRI HARI GOVIND SINGH ASSESSEE BY NONE DATE OF HEARING 11.02.2015 DATE OF PRONOUNCEMENT 11.02.2015 ITA NO.5824/MUM/2013 ASSESSMENT YEAR: -2007-08 2 | P A G E 2. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) ON 05.05.2009 ASSESSING TOTAL INCOME OF RS. 15,36,15,200/-. SUBSEQUENTLY, THE ASSESSING OFFICER REOPENED THE AS SESSMENT U/S 147 ON THE GROUND THAT THE TAX PAYABLE ON THE TOTAL INCOME IN THE COMPUTATION UNDER THE NORMAL PROVISIONS OF THE ACT IS LESS THAN 10% OF TH E BOOK PROFIT U/S 115JB. ACCORDINGLY, THE ASSESSING OFFICER PASSED THE RE-AS SESSMENT ORDER AND ASSESSED THE TAX UNDER MAT BEING 10% OF BOOK PROFIT. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE REBATE U/S 88E OF T HE ACT TO BE GIVEN TO THE ASSESSEE ON THE SPECIFIC RATE ON BOOK PROFIT ON PAR WITH THE TAX COMPUTED UNDER THE NORMAL PROVISIONS OF THE ACT. THE ASSESSING OFF ICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. 3. ON APPEAL, THE CIT(A) HAS ALLOWED THE CLAIM OF T HE ASSESSEE REGARDING REBATE U/S 88E OUT OF THE TAX CALCULATED ON BOOK PR OFIT ON PAR WITH THE TAX COMPUTED UNDER NORMAL PROVISIONS BY FOLLOWING THE D ECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2008-09. THE RELEVANT FINDING OF THE CIT(A) IS IN PARA 2.3 OF THE IMPUGNED ORDER AS UNDER:- 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE AS WEL L AS ARGUMENTS OF THE APPELLANT. I FIND THAT THE HONBLE ITAT IN APPELLANTS OWN CASE FOR A.Y. 2008-09 VIDE APPEAL NO. 7169/M/2011 DATED 12 TH OCTOBER, 2012 HAS HELD AS UNDER: WE HAVE HEARD BOTH THE PARTIES, CAREFULLY PERUSED T HE ORDERS OF THE REVENUE AUTHORITIES AND THE DECISION CITED BY THE LD COUNSE L. CORE ISSUE TO BE DECIDED BY US IN THIS APPEAL IS WHETHER REBATE U/S 88E OF THE ACT IS AVAILABLE IN COMPUTING THE BOOK PROFITS U/S 115JB OF THE ACT OR NOT? THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE VIDE THE DECISION CITED BY THE LD COUNSEL. IT IS RELEVANT TO REPRODUCE THE HELD PORTION OF THE SA ID KARNATAKA HIGH COURT ITA NO.5824/MUM/2013 ASSESSMENT YEAR: -2007-08 3 | P A G E JUDGMENT IN THE CASE OF CIT VS. M/S. HORIZON CAPITA L LTD. (SUPRA) WHICH IS AS UNDER: SECTION 115JB PROVIDES THAT IF THE TAX PAYABLE ON THE TOTAL INCOME IS LESS THAN 7.5 PER CENT OF THE BOOK PROFIT, THE TAX PAYABLE UNDER THIS PROVISION SHALL BE THE AMOUNT OF INCOME TAX AT THE RATE OF 7.5 PER CENT OF BOOK PROFIT. IN OTHER WORDS, IF COMPUTATION OF I NCOME IS DONE UNDER THE PROVISIONS OF THE ACT AND IF THE TAX PAYABLE IS LESS THAN 7.5 PER CENT OF THE BOOK PROFIT AND THE ASSESSEE IS A COMPANY, T HEN THE MINIMUM TAX PAYABLE BY SUCH A COMPANY IS 7.5 PER CENT OF TH E BOOK PROFIT. EXCEPT TO THAT EXTENT, ALL OTHER PROVISIONS IN THE ACT ARE APPLICABLE IN RESPECT OF BOTH TYPE OF ASSESSMENT [PARA 6]. FROM THE ABOVE, IT IS EVIDENT THAT REBATE IN RESPE CT OF TAX PAID U/S 88E IS AVAILABLE TO THE ASSESSEE FOR COMPUTATION OF TOTAL TAXABLE IN COME UNDER REGULAR PROVISIONS OF THE ACT AS WELL AS FOR COMPUTATION OF BOOK PROFITS UNDER THE SPECIAL PROVISIONS UNDER SECTION 115JB OF THE ACT. IN FACT, IDENTICAL VIEW WAS TAKEN BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. TOUCHSTO NE CAPITAL MARKET SERVICES PVT. LTD. (SUPRA) AND THE RELEVANT PARA 5 READS AS UNDER : BEFORE US, AN IDENTICAL ISSUE CAME UP IN THE CASE OF ACIT VS. M/S. SHREEPATI HOLDING & FINANCE PVT. LTD. IN ITA NO. 6046/M/2011 WHEREIN WE HAVE HELD THAT THE ASSESSEE IS ENTITLED FOR CLAIMING TAX REBA TE U/S 88E FROM THE NORMAL PROFIT AND THEREAFTER THE PROFIT TO BE COMPARED WIT H THE PROFIT AS PER PROVISIONS OF SECTION 115JB. IN THAT CASE, WE HAVE FOLLOWED THE DECISION OF HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. HORIZON CAPITAL LTD. IN ITA NO.434 OF 2010 WHEREIN THE HONBLE KARNATAKA HI GH COURT HAS HELD THAT: THEREFORE, THE CONTENTION THAT THIS BENEFIT IS NOT AVAILABLE TO THE ASSESSEE WHOSE TOTAL INCOME IS ASSESSED U/S 115JB H AS NO SUBSTANCE. IN OTHER WORDS, WHEN THE TOTAL INCOME IS ASSESSED AND THE TAX PAID U/S 88E IS GIVEN DEDUCTION, BY WAY OF REBATE, U/S 8 7 OF THE ACT. THIS IS THE LEGISLATIVE INTENT. THAT IS A PROMISE TO GIVE D EDUCTION OF THE TAX ALREADY PAID. THIS IS THE MODE IN WHICH TAX ALREADY PAID IS HANDED BANK AT THE TIME OF FINAL COMPUTATION. THEREFORE, T HE JUDGMENT REFERRED BY THE TRIBUNAL IS STRICTLY IN ACCORDANCE WITH LAW AND DOES NOT SUFFER FROM ANY LEGAL INFIRMITY, WHICH CALLED F OR INTERFERENCE. THE FACTS AND ISSUE INVOLVED IN THE PRESENT APPEA L ARE IDENTICAL WITH THE FACTS AND ISSUES IN ITA NO.6046/M/2011 (SUPRA). RESPECTFULLY FOLLOWING THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. HORIZON CAPITAL LTD (SUPRA) AND OUR OWN DECISION IN ITA NO.6046/M/2011, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ITA NO.5824/MUM/2013 ASSESSMENT YEAR: -2007-08 4 | P A G E FINDINGS OF LD CIT (A). THE FINDINGS OF THE LD CIT (A) ARE CONFIRMED. GROUND RAISED BY THE REVENUE IS DISMISSED. 8.1. THUS, IT IS DECIDED IN FAVOUR OF THE ASSESSEE THAT REBATE U/S 88E OF THE ACT IS REQUIRED TO BE GIVEN OUT OF THE TAX, CALCULA TED AT THE SPECIFIED RATE ON THE BOOK PROFITS ON PAR WITH THE TAX COMPUTED UND ER NORMAL PROVISIONS. THUS, THE ISSUE IS COVERED BY THE DECISIONS MENTION ED ABOVE. ACCORDINGLY, GROUND NOS. 1 & 2 OF THE REVENUES APPEAL ARE DISMI SSED. IN VIEW OF THE ABOVE , THE ISSUE IS COVERED BY THE DECISIONS MENTIONED ABOVE . ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO A LLOW REBATE U/S 88E OUT OF THE TAX CALCULATED AT THE SPECIFIED RATE ON THE BOOK PROFIT ON PAR WITH THE TAX COMPUTED UNDER NORMAL PROVISIONS. THE APPEAL OF THE APPELLAN T IS, THUS, ALLOWED. 4. THUS IT IS CLEAR THAT THE ISSUE OF ALLOWING THE REBATE U/S 88E FOR COMPUTATION OF BOOK PROFIT U/S 115JB IS COVERED BY THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2008-09. THE TRIBUNAL HAS RELIED UPON THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. M/S HOR IZON CAPITAL LTD. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF CIT(A) QUA THIS ISSUE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUCNED IN THE OPEN COURT ON THIS 11 TH DAY OF FEBRUARY 2015. SD/- SD/- (D.KARUNAKARA RAO) (VIJAY PAL RAO) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) MUMBAI DATED 11-02-2015 SKS SR. P.S, ITA NO.5824/MUM/2013 ASSESSMENT YEAR: -2007-08 5 | P A G E COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI