ACIT CIR 4(2), MUMBAI V. SVS SECURITIES P.LTD, MUMBAI

ITA 6898/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2691 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 17-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 27-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 115JB; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI SANJAY ARORA (AM) AND SHRI RAM LAL NEGI (J M) ITA NO 6898/MUM/2013 ASSESSMENT YEAR: 2007-08 THE ACIT, CIR. 4(2), ROOM NO. 642, 6 TH FLOOR, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI- 400 020. VS. M/S. SVS SECURITIES PVT. LTD. 32-B, KHATAU BUILDING ANNEX, A.D.MARG, MUMBAI- 400 023. PAN:- AABCS5982K (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. RAVINDER SINDHU. RESPONDENT BY : SHRI. SANJAY PARIKH. DATE OF HEARING: 26/05 / 2016 DATE OF PRONOUNCEMENT: 04/10/20 16 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST ORDER DATED 18/09/2013 PASSED BY THE LD. CIT (APPEALS)-8 MUMBAI FOR THE ASST. YEAR 2007-08, WHEREBY THE LD. CIT(A) ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143(3) READ WIT H RULE 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED ITS RETURN OF INCOME FOR THE RELEVANT ASST. YEAR DECLARING THE TOTAL INCOME OF R S. 14,44,09,280/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) AND THE TOTAL I NCOME WAS DETERMINED AT RS. 14,67,09,507/- AND TOTAL TAX PAYABLE WAS WORKED OUT AT RS. 75,52,111/- AFTER GIVING REBATE U/S 88E OF RS. 3,72,81,916/-. T HE BOOK PROFIT U/S 115JB 2 ITA NO 6898/MUM/2013 ASSESSMENT YEAR: 2007-08 WAS CALCULATED AT RS. 14,40,13,793/- AND THE TAX PA YABLE UNDER THE SAID SECTION WAS RS. 1,61,65,868/-. SUBSEQUENTLY, IT WAS FOUND THAT THE INCOME WAS TAXED AT A LOWER RATE, HENCE, THE ASSESSMENT WAS RE OPENED U/S 147 AFTER RECORDING THE REASONS. AGGRIEVED, THE ASSESSEE FILE D APPEAL BEFORE THE LD. CIT(A) WHO AFTER HEARING THE ASSESSEE ALLOWED THE SAME REL YING ON THE DECISION OF ITAT, MUMBAI RENDERED IN APPELLANTS OWN APPEAL FOR THE ASSESSMENT YEAR 2008-09. AGAINST THE SAID ORDER THE REVENUE IS IN A PPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING EFFECTIVE GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE A.O TO ALLOW REBA TE U/S. 88E FROM INCOME COMPUTED U/S 115JB OF THE INCOME TAX ACT, 19 61. 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E 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 ASSESSING OF FICER BE RESTORED. 3. BEFORE US THE LD. AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT THE CASE OF THE ASSESSEE IS COVERED BY THE DECISION IN THE ASSE SSEES OWN APPEAL (ITA NO. 6149/MUM/2011) FOR THE A.Y. 2008-09. THE LD. DR DID NOT DISPUTE THE SAID FACT. WE NOTICE THAT THE CO-ORDINATE BENCH HAS DECI DED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN REVENUES APPEAL FILED AG AINST ORDER DATED 05/07/2011 PASSED BY THE LD. CIT (APPEALS)-8, MUMBA I. THE CO-ORDINATE BENCH, ON THE SAME ISSUE RAISED BEFORE IT, DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION IN THE CA SE OF HORIZON CAPITAL LTD. VS. ITO (ITA NO 592/BANG/10). 3 ITA NO 6898/MUM/2013 ASSESSMENT YEAR: 2007-08 4. IN THE CASE OF HORIZON CAPITAL LTD. VS. ITO(SUPRA) THE ITAT BANGAL ORE BENCH HAS DECIDED THE SIMILAR ISSUE HOLDING AS UNDER:- 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE RIVAL CONTENTIONS, WE FIND THAT THE ONLY DISPUTE IS WHETH ER THE REBATE OF SIT PAID BY THE ASSESSEE IS ALLOWABLE FROM THE INCO ME TAX COMPUTED AGAINST THE TOTAL INCOME COMPUTED UNDER SECTION 115 JB OF THE INCOME TAX ACT, 1961. THE TERM 'TOTAL INCOME' HAS B EEN DEFINED UNDER THE INCOME TAX ACT, 1961 AS 'THE TOTAL AMOUNT OF INCOME REFERRED TO IN SECTION 5, COMPUTED IN THE MANNER LA ID DOWN IN THIS ACT.' SECTION 5 OF THE INCOME 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 REGULA R PROVISIONS OF THE INCOME TAX ACT, 1961 AND IN THE CASE OF A COMPA NY IT CAN BE ARRIVED AT BOTH UNDER THE REGULAR PROVISIONS OF THE INCOME TAX ACT AND UNDER THE DEEMING PROVISION UNDER SECTION 115JB OF THE ACT. IT HAS BEEN PROVIDED THAT WHERE THE INCOME TAX PAYABLE BY THE ASSESSEE ON THE TOTAL INCOME COMPUTED UNDER REGULAR PROVISIONS OF THE ACT IS LESS THAN 7 % OF THE BOOK PROFIT PREPA RED IN ACCORDANCE WITH THE COMPANIES ACT, THE HIGHER OF THE TAX I.E. THE BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSES SEE AND TAX PAYABLE BY THE ASSESSEE SHALL BE THE AMOUNT OF INCO ME TAX AT THE SPECIFIED RATE. WHEN WE LOOK AT THE PROVISIONS OF S ECTION 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 IN COME 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 COM PUTED UNDER THE REGULAR PROVISIONS OF THE ACT OR UNDER SECTION 115J B OF THE INCOME 4 ITA NO 6898/MUM/2013 ASSESSMENT YEAR: 2007-08 TAX ACT, 1961. EVEN THOUGH THE SUB SECTION (1) OF S ECTION 115JB STARTS WITH THE NON-ABSTANTE CLAUSE,'NOT WITHSTANDI NG ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT', WE F IND 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 DEDUCT IONS, REBATE, ETC THE OTHER PROVISIONS OF THE INCOME TAX ACT SHALL AP PLY. THEREFORE IT IS CLEAR THAT THE PROVISION OF SECTIONS 87 AND 88A TO 88E ALSO APPLY AFTER THE TOTAL INCOME IS COMPUTED UNDER SECTION 11 5JB OF' THE INCOME TAX ACT, 1961 AND SINCE THE ASSESSEE'S TOTAL INCOME INCLUDES THE INCOME FROM THE TAXABLE SECURITIES TRANSACTIONS , THE ASSESSEE IS ENTITLED TO A DEDUCTION OF THE AMOUNT EQUAL TO THE STT PAID BY HIM IN RESPECT OF THE TAXABLE SECURITIES TRANSACTIONS ENTE RED INTO IN THE COURSE OF BUSINESS DURING THE PREVIOUS YEAR. THE AS SESSEE'S APPEAL IS THUS ALLOWED AND THE ASSESSING OFFICER IS DIRECT ED TO GIVE REBATE UNDER SECTION 88E FOR THE STT PAID BY THE ASSESSEE. 5. SINCE THE IDENTICAL ISSUE HAS ALREADY BEEN DECI DED IN FAVOUR OF THE ASSESSEE, THERE IS NO REASON TO DEVIATE FROM THE VIEW TAKEN B Y THE CO-ORDINATE BENCH. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF T HE CO-ORDINATE BENCH RENDERED IN ASSESSEES OWN CASE AFORESAID FOR THE A.Y. 2008- 09 UPHOLD THE ORDER PASSED BY THE LD CIT(A) AND DISMISS THE GROUNDS OF THE APP EAL OF THE REVENUE. 5. IN THE RESULT APPEAL FILED BY THE REVENUE FOR TH E A.Y. 2007-08 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH OCTOBER, 2016 5 ITA NO 6898/MUM/2013 ASSESSMENT YEAR: 2007-08 SD/- SD/- ( SANJAY ARORA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 4/10/2016 / 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 PRAMILA SR. NO. DETAILS DATE INITIALS DESIGNATION