ASST CIT 4(3), MUMBAI V. KAUSHIK SHAH SHARES & SECURITIES P.LTD, MUMBAI

ITA 6346/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88615 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 29-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JINESH JOSHI
• Section: 115JB; 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI . , , BEFORE SHRI D. M ANMOHAN , V ICE P RESIDENT (M.Z.) AND SHRI SANJAY ARORA , ACCO UNTANT MEMBER ITA NO. 6346 /MUM/201 3 (A.Y.200 7 - 08 ) ACIT 4(3) 6 TH FLOOR, ROOM NO.649 AAYAKAR BHAVAN MUMBAI - 400 0 20 . (APPELLANT ) VS. M/S. KAUSHIK SHAH SHARES & SECURITIES PVT. LTD. , 501/502/602, HERITAGE PLAZA, A, WING, 5 TH FLOOR, NITYANAND NAGA R, ANDHERI (E) , MUMBAI - 400 0 69 . GIR NO./ PAN : AAACK 1702 C (RESPONDENT) APPELLANT BY : SHRI V.K. BORA RESPONDENT BY : SHRI JINESH JOSHI DATE OF HEARING : 1 8 /0 3 /2015 DATE OF PRONOUNCEMENT : 18 /0 3 /2015 ORDER PER SANJAY ARORA, AM : TH E PRESENT APPEAL IS FILED BY THE REVENUE . IT IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A) - 8 , MUMBAI, DATED 02 /08/201 3 FOR THE ASSESSMENT YEAR 200 7 - 08 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO ALLOW TO THE ASSESSEE, THE REBATE U/S. 88E WHEN TAX LIABILITY WAS DETERMINED U/S. 115JB OF THE I NCOME TAX ACT . 2. O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING STT PAYMENT AS REBATE U/S. 88E FROM INCOME TAX WHEREAS THE REBATE U/S.88E CANNOT BE EQUATED WITH THE INCOME TAX. 2 ITA NO.6346/MUM/2013 (A.Y.2007 - 08) 3. ON THE FACTS AND IN TH E CIRCUMSTANCES OF THE CASE AND IN LAW, THE IMPUGNED ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW AND CONSEQUENTLY MERITS TO BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2. WE HAVE HEARD THE LD. DR AND THE LD. COUNSEL. 2. 1 THE ISSUE IN THE PRESENT AP PEAL IS WITH REFERENCE TO GIVING CREDIT FOR THE STT PAID UNDER SECTION 88E WHILE INVOKING THE PROVISIONS OF SECTION 115JB . THIS GROUND OF APPEAL IS AGAINST AOS FINDING THAT THE TAX LIABILITY U /S. 115JB OF THE INCOME TAX ACT WAS HIGHER THAN THE NORMAL TAX , HOLDING THAT THE ASSESSEE WAS LIABLE TO PAY U/S. 11 5JB INSTEAD OF NORMAL TAX BY NOT ALLOWING CREDIT OF SECURITIES TRANSACTION TAX FROM TAX PAYABLE U /S. 115JB. THE RELEVANT FACTS APPEARING FROM THE ASSESSMENT ORDER ARE THAT THE ASSESSEE HAD MADE THE PAYM ENT OF TAX UNDER NORMAL PROVISIONS BY COMPARING ITS TOTAL INCOME WITH INCOME U/S. 115J B BEFORE CLAIMING REBATE U/S. 88E. UPON QUERY BY THE AO AS TO WHY TOTAL INCOME AFTER GRANTING REBATE U/S.8 8 E BE NOT COMPARED WITH INCOME U/S. 115J B, THE APPELLANT M ADE ELABORATE SUBMISSIONS POINTING OUT THAT TAX REBATE IS A STEP WHICH COMES AFTER DETERMINING INCOME TAX PAYABLE ON TOTAL INCOME COMPUTED AS PER APPLICABLE PROVISIONS INCLUDING MAT, THEREFORE, THE COMPARISON U/S. 115JB IS BETWEEN INCOME TAX PAYABLE ON TOTAL INCOME AND 10% OF THE BOOK PROFIT, POINTING OUT THAT SUCH VIEW WAS SUPPORTED BY THE INCOME TAX RETURN (ITR - 6) PRESCRIBED BY CBDT WHEREIN THE GROSS TAX LIABILITY BEFORE CLAIM OF REBATE U/S. 88E IS FIRST TO BE COMPARED WITH TAX CREDIT UNDER MAT AND THEN FROM THE HIGHER OF THE MAT LIABILITY AND TAX LIABILITY UNDER NORMAL PROVISIONS OF THE ACT, THE TAX REBATE U/S. 88E IS TO BE REDUCED TO ARRIVE AT 3 ITA NO.6346/MUM/2013 (A.Y.2007 - 08) A FINAL TAX PAYABLE BY THE ASSESSEE . SUCH CONTENTION OF THE ASSESSEE DID NOT FIND FAVOUR WITH AO WHO ENTERTAINED A VIEW THAT PROVISION OF SECTION 115J ARE TO ENSURE COLLECTION OF TAX WHERE THE TAX LIABILITY UNDER NORMAL PROVISIONS OF THE ACT WAS MUCH LESS. PLACING RELIANCE UPON CIRCULAR NO.13 OF 2001 DATED 09.01.20 01 ISSUED BY CBDT, THE AO HAS ARGU ED THAT THE INCOME TAX AS PER SECTION 115JB SHALL BE @10% OF THE BOOK PROFIT IF THE INCOME TAX PAYABLE ON TOTAL INCOME AS COMPUTED UNDER THE ACT WAS LESS THAN 10% OF THE BOOK PROFIT. AO ALSO HELD THAT THE REBATE U/S. 88E IS AKIN TO THAT IN RESPECT OF LIP /PF. 2. 2 THE ASSESSEE CONTENDED BEFORE THE LD. CIT(A) THAT PAYMENT UNDER SECTION 88E IS ALSO TO BE ALLOWED WHILE WORKING OUT TAX LIABILITY UNDER SECTION 115JB FOR THE PURPOSE OF DETERMINING THE TAXABILITY UNDER SECTION 115 JB. IN SUPPORT THE ASSESSEE RELIED ON THE DECISION IN THE CASE OF M/S. HORIZON CAPITAL LTD. OF ITAT BANGALORE AND ALSO IN THE CASE OF NAMAN SECURITIES FINANCE PVT. LTD. OF THE MUMBAI BENCH. THE LD. CIT(A) CONSIDERED THE CONTENTIONS OF THE ASSESSEE AND ALLOWED THE CLAIM OF THE ASS ESSEE BY STATING AS UNDER VIDE PARA 2.3 : - I HAVE CONSIDERED THE FACTS OF THE CASE. IN THE CASE UNDER CONSIDERATION, THE ONLY DISPUTE IS AS TO WHETHER THE REBATE U/S.88E OF THE ACT IS ALLOWABLE WHILE COMPUTING THE INCOME AND TAX PAYABLE U/S. 115JB OF THE ACT. THE HON'BLE KARNATAKA HIGH COURT AND VARIOUS BENCHES OF ITAT, AS MENTIONED ABOVE, HAVE HELD THAT THE REBATE U/S. 88E OF THE ACT IS ALLOWABLE TO THE APPELLANT WHILE COMPUTING THE TAX LIABILITY U/S.115JB OF THE ACT. FOLLOWING THE ABOVE DECISION, THE AO IS DIRECTED TO ALLOW DEDUCTION U/S.88E OF THE ACT. FOLLOWING THE ABOVE DECISION, THE AO DIRECTED TO ALLOW DEDUCTION U/S.88E OF THE ACT TO THE APPELLANT WHILE COMPUTING THE TAX LIABILITY U/S. 115JB OF THE ACT. THIS GROUND OF APPEAL IS, THUS, ALLOWED. 4 ITA NO.6346/MUM/2013 (A.Y.2007 - 08) 3. BEFORE US, BOTH THE COUNSELS FAIRLY ADMITTED THAT THIS ISSUE IS NOW CRYSTALLIZED BY THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. M/S. HORIZON CAPITAL LTD. IN ITA N O.434 OF 2010 DATED 24.10.2011 AND ALSO BY OTHER CO - ORDINA TE BENCH DECISIONS ON THE ISSUE NAMELY IN THE CASE OF : (I) AMBIT SECURITIES BROKING P. LTD. VS. ADCIT IN ITA NO.7856/M/2011 FOR (AY 08 - 09) ORDER DATED 06.06.2013 ; (II) DY. CIT VS. ARCADIA SHARE & STOCK BROKERS PVT. LTD. IN ITA NO.1515/M/2012 FOR (A Y 08 - 09) ORDER DATED 20.03.2013; (III) M/S. AMBIT SECURITIES BROKING P. LTD. VS. ADDL. CIT IN ITA NO.7856/M/2011 FOR (AY 08 - 09) ORDER DATED 06.02.2013; AND (IV) SVS SECURITIES PVT. LTD. IN ITA NO.6149/M/2011 FOR (AY 08 - 09) ORDER DATED 08.08.2012 3. 1 SINCE THE LD. CIT(A) FOLLOWED THE DECISION OF THE CO - ORDINATE BENCH IN THE CASE OF HORIZON CAPITAL LTD. WHICH WAS CONFIRMED BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE REFERRED SUPRA, AND ALSO OTHER CO - ORDINATE BENCH DECISION IN THE CASE OF NAMAN SECURITIES FINANCE PVT. , W HICH IN TURN IS BEING FOLLOWED BY OTHER CO - ORDINATE BENCHES, WE DO NOT SEE ANY MERIT IN THE GROUNDS RAISED BY THE REVENUE. 4. IN THE RESULT, REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 8 /03/ 2015 . 18 / 03 / 2015 SD/ - SD/ - ( . / D. M ANMOHAN ) ( / SANJAY ARORA ) / V ICE P RESIDENT / ACCOUNTANT MEMB ER MUMBAI ; DATED 18 /03/ 2015 . . ./ JV , SR. PS 5 ITA NO.6346/MUM/2013 (A.Y.2007 - 08) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI