ACIT, New Delhi V. M/s. CNB Finwiz Ltd., New Delhi

ITA 711/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69570 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 10-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Assessee Lawyers: C S AGARWAL; RAVI MAL
• Section: 115JB; 6

Judgement Text

ITA NOS. 2224/DEL/2011 & 711/DEL/2012 AND C.O. NO. 98/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NOS. 2224/DEL/2011 & 711/DEL/2012 A.YRS. : 2007-08 & 2008-09 DCIT, CIRCLE 3(1), NEW DELHI VS. M/S CNB FINWIZ LIMITED, 4318/3, ANSARI ROAD, DARYA GANJ, NEW DELHI (PAN: AABCB2613A) AND CROSS OBJECTION NO. 98/DEL/2012 (IN ITA NO. 711/DEL/2 012) A.Y. 2008-09 M/S CNB FINWIZ LIMITED, VS. ACIT, CIRCLE-3(1), 4318/3, ANSARI ROAD, NEW DELHI DARYA GANJ, NEW DELHI (PAN: AABCB2613A) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. C.S. AGARWAL, SR. ADVOCATE & SH. RAVI MAL, ADVOCATE DEPARTMENT BY : MS. NIDHI SRIVASTAVA, SR. D.R. ORDER ORDER ORDER ORDER PER PER PER PER SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA SHAMIM YAHYA THESE APPEALS BY THE REVENUE AND CROSS OBJECTION B Y THE ASSESSEE EMANATE OUT OF ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (A) FOR THE RESPECTIVE ASSESSMENT YEARS. SINCE THE ISSUE RAISED IN REVENUES APPEALS ARE COMMON, THESE ARE BEING CONSOL IDATED FOR THE SAKE OF CONVENIENCE. ITA NOS. 2224/DEL/2011 & 711/DEL/2012 AND C.O. NO. 98/DEL/2012 2 2. THE GROUNDS RAISED IN THE REVENUES APPEAL NO. 2224/DEL/2011 READ AS UNDER:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N DIRECTING TO COMPUTE THE INCOME OF THE ASSESSEE AS PER PRESCRIBED I.E. PART-B-TTI OF THE RETURN I.E. BEFORE ALLOWING REBAT E U/S. 88E IN COLUMN 6, IGNORING THAT:- (A) THE TAX PAYABLE IS TO BE DECIDED BY THE PROVISIONS OF THE I.T. ACT AND NOT AS PER THE COLUMNS IN THE ITR FORM. (B) AS PER SECTION 6 OF SECTION 115JB, THE STOCK BROKE R HAS NOT BEEN SPECIFICALLY EXCLUDED FROM THE PROVIS IONS OF SECTION 115JB. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. THE GROUNDS RAISED IN THE REVENUES APPEAL NO. 711/DEL/2012 READ AS UNDER:- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT PROVISION OF SECTION 115JB ARE NOT APPLICABLE TO TH E ASSESSEES CASE. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RI GHT TO AMEND, MODIFY ALTER, AND OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS AP PEAL. 4. THE GROUND RAISED IN THE ASSESSEES CROSS OBJE CTION NO. 98/DEL/2012 READ AS UNDER:- ITA NOS. 2224/DEL/2011 & 711/DEL/2012 AND C.O. NO. 98/DEL/2012 3 THAT THE REBATE U/S. 88E MAY BE ALLOWED FROM THE TAX PAYABLE IN RESPECT OF STT PAID BY THE APPELLANT ON THE INCOME ARISING OUT OF TRANSACTION ON WHICH STT HAS BEEN PAID IN CASE IT I S HELD THAT THE PROVISIONS OF SECTION 115JB ARE APPLICABLE TO THE FACTS OF THE CASE. 5. WE FIND THAT IN THE REVENUES APPEALS THE SOLITA RY ISSUE WHICH NEEDS ADJUDICATION IS THAT WHETHER FOR THE PURPOSE OF APPLICABILITY OF THE PROVISIONS OF SECTION 115JB OF THE ACT, SHOULD BE TAKEN ON GROSS BASIS I.E. BEFORE ALLOWING THE REBATE U/S. 88E OF T HE ACT AND IF THE ANSWER TO AFORESAID IS IN NEGATIVE THEN WHETHER TH E REBATE UNDER SECTION 88E WOULD ALSO BE AVAILABLE TO THE ASSESSEE AGAINST THE TAX PAYABLE UNDER SECTION 115JB OF THE I.T. ACT. 6. AT THE OUTSET, LD. COUNSEL OF THE ASSESSEE SU BMITTED THAT THE AFORESAID ISSUES ARE COVERED IN FAVOUR OF THE ASSE SSEE BY THE DECISION OF THE JURISDICTIONAL HIGH COURT AND VARIOUS ORDE RS OF THE TRIBUNAL. 7. LD. DEPARTMENTAL REPRESENTATIVE FAIRLY AGREED T HAT THE ISSUE INVOLVED IS COVERED IN FAVOUR OF THE ASSESSEE. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. FOR PROPERLY APPRECIATING THE ISSUE, WE CAN GAINFULLY REFER HER THE PROVISIONS OF SECTION 115JB OF THE I.T. ACT, AS EXTRACTED HEREINBELOW. NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, WHERE IN THE CASE OF AN ASSESSEE, BEING A COMPANY, INCOME TAX PAYABLE ON THE TOTAL INCOME AS COMPUTED UNDER THIS ACT, IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ITA NOS. 2224/DEL/2011 & 711/DEL/2012 AND C.O. NO. 98/DEL/2012 4 ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1 ST DAY OF 2001, IS LESS THAN 10 PER CENT OF HIS BOOKS PROF ITS, SUCH BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE, AND THE TAX PAYABLE BY THE ASSESSEE ON SUCH TOTAL INCOME SHALL BE AMOUNT OF INCOME TAX AT THE RATE OF 10 PER CENT. 9. IN THIS REGARD, WE FIND THAT THE FOLLOWING ANAL YSIS OF THE ABOVE AS GIVEN IN THE SYNOPSIS BY THE LD. COUNSEL OF THE AS SESSEE IS VERY COGENT. ON GOING THROUGH THE PLAIN LANGUAGE OF SECTION 115JB, IT IS EVIDENT THAT THE EXPRESSION USED IN TH IS SECTION IS TAX PAYABLE. THE WORD TAX PAYABLE, I N RESPECT OF INCOME TAX PAYABLE ON THE TOTAL INCOME , DOES NOT MEAN THE ULTIMATE OR NET AMOUNT WHICH IS PAYABLE UNDER THE ACT. IN THE CONTEXT IF MEANS TAX COMPUTED EITHER UNDER THE NORMAL PROVISIONS OR U/S. 115JB WITHOUT ADJUSTMENT TOWARDS REBATES, RELIEFS A ND CREDITS. ONCE SUCH ADJUSTMENTS ARE MADE, THE AMOUNT PAYABLE AS TAX WOULD NO LONGER BE CHARACTERIZED AS TAX PAYABLE UNDER NORMAL PROVISION OR AS TAX PAYABLE UNDER THE MAT PROVISIONS. INSTEAD IT WOULD BE CHARACTERIZED AS TAX PAYABLE UNDER THE ACT. IT IS ITA NOS. 2224/DEL/2011 & 711/DEL/2012 AND C.O. NO. 98/DEL/2012 5 SUBMITTED THAT SECTION 115JB(1) ITSELF DOES NOT USE THE WORDS TAX PAID. IT USES THE WORDS TAX PAYABLE. TAX PAYABLE U/S 115JB(1) IS THE GROSS TAX LIABILITY AND NOT THE NET OR ULTIMATE TAX LIABILITY U/S. 115JB(1) OF THE ACT. IT SHALL BE NOTED THAT FOR THE PURPOSE OF THE APPLICABILITY OF PROVISIONS OF SECTION 115JB OF THE ACT, THE INCOME TAX PAYABLE ON THE TOTAL INCOME COMPUTED UNDER THE NORMAL PROVISIONS OF THE INCOME TAX ACT AN D IS TO BE COMPARED WITH 10 PER CENT OF THE BOOK PROFI TS, AND IF THE TAX PAYABLE ON THE NORMAL PROVISIONS OF T HE ACT IS LESS THAN THE 10% OF THE BOOK PROFITS, THEN THE ASSESSEE IS LIABLE TO PAY TAX UNDER SECTION 115JB O F THE ACT. 10. IN THIS REGARD FOLLOWING TRIBUNALS DECISIONS R ELIED UPON BY THE LD. COUNSEL OF THE ASSESSEE IS ALSO RELEVANT. INCOME TAX OFFICER VS. ADVENT STOCK BROKING PVT. LT D. (I.T.A. NO. 1276/KOL/2010 DATED 9.9.2011) 4. WE FIND THAT IN PRESENT ASSESSMENT YEAR PROVISION S OF SECTION 115JB OF THE ACT PROVIDES FOR A MINIMUM ALTE RNATE TAX FOR COMPANIES UNDER THIS PROVISION AND COMPANY IS ITA NOS. 2224/DEL/2011 & 711/DEL/2012 AND C.O. NO. 98/DEL/2012 6 REQUIRED TO PAY AT LEAST 10% OF ITS BOOK PROFIT AS CORPORATE TAX AND IN CASE TAX LIABILITY OF A COMPANY UNDER REG ULAR PROVISION IS MORE THAN THIS AMOUNT THE PROVISION OF MA T WILL NOT APPLY AND COMPANY WILL PAY CORPORATE TAX AS PER REGULAR SCHEME. SIMULTANEOUSLY, THE ASSESSEE IS ELIGIBLE F OR REBATE U/S. 88E(1) OF THE ACT AS IS AVAILABLE TO ASSESSEE WHOSE TOTAL INCOME IN PREVIOUS YEAR INCLUDES ANY INCOME CHARGEA BLE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PR OFESSION ARISING FROM TAXABLE SECURITIES UNDER SUB-SECTION ( 2) OF SECTION 88E OF THE ACT AN ASSESSEE IS ELIGIBLE FOR DEDUCTION FROM THE AMOUNT OF INCOME TAX ON SUCH INCOME ARISING FROM SECURITIES FROM SUCH TRANSACTIONS COMPUTED IN THE MA NNER PROVIDED IN SECTION 88E(2) OF THE ACT OF AN AMOUNT E QUAL TO SECURITIES TRANSACTION TAX PAID BY HIM IN RESPECT OF TAXABLE SECURITIES TRANSACTION ENTERED INTO IN THE COURSE O F HIS BUSINESS DURING THE RELEVANT PREVIOUS YEAR. IT MEAN S THAT IN CASE THE ASSESSEES INCOME UNDER NORMAL PROVISIONS I S MORE THAN 10% OF BOOK PROFIT, AS IS IN THE PRESENT C ASE, MAT PROVISION U/S. 115JB OF THE ACT WILL NOT APPLY. I N OUR VIEW, THE TAX PAYABLE AS REFERRED TO IN SECTION 115JB OF THE ACT IS GROSS TAX PAYABLE AND NOT THE TAX AFTER REBATE UNDE R OTHER PROVISIONS OF THE ACT. IN VIEW OF THE ABOVE, WE AR E OF THE VIEW THAT THE TAX PAYABLE ON THE INCOME COMPUTED UND ER NORMAL PROVISIONS, IN THE CASE OF THE ASSESSEE, IS MU CH GREATER THAN 10% OF BOOK PROFIT AND, THEREFORE, THE FINDINGS OF CIT(A) ARE CLEARLY WITHIN THE PROVISIONS OF THE ACT. APPEAL OF THE REVENUE IS DISMISSED. ITA NOS. 2224/DEL/2011 & 711/DEL/2012 AND C.O. NO. 98/DEL/2012 7 11. FROM THE ABOVE, IT IS EVIDENT THAT TAX PAYABLE A S REFERRED TO SECTION 115JB OF THE ACT IS GROSS TAX PAYABLE AND N OT THE TAX AFTER THE REBATE UNDER OTHER PROVISIONS OF THE ACT. IN VIEW OF THE ABOVE, WE AGREE WITH THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE THAT THE TAX PAYABLE ON THE BASIS OF COMPUTATION OF INCOME UN DER THE NORMAL PROVISIONS OF THE INCOME TAX ACT IN THE CASE OF THE ASSESSEE IS MUCH GREATER THAN 10% OF THE BOOK PROFIT, AS SUCH THE PR OVISIONS OF SECTION 115JB ARE NOT APPLICABLE. 12. WE FURTHER FIND THAT THE ALTERNATIVE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE IS THAT IF IT IS HELD THE P ROVISIONS OF SECTION 115JB OF THE ACT ARE APPLICABLE THEN THE ASSESSEE S HOULD BE ENTITLED FOR RELIEF OF REBATE U/S. 80E OF THE ACT FROM THE T AX PAYABLE U/S 115JB OF THE ACT. IN THIS REGARD LD. COUNSEL OF THE ASSESSE E HAS REFERRED TO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. MBL & CO. LIMITED IN I.T.A. NO. 1181/2011 DATED 17.5. 2013. ORDER OF THE KARNATAKA HIGH COURT IN THE CASE OF C.I.T. VS. HORIZON CAPITAL LTD. 204 TAXMAN 59. 13. ON CAREFUL CONSIDERATION, WE FIND THAT THE PROP OSITION THAT ASSESSEE IS ENTITLED TO RELIEF UNDER SECTION 80E OF THE ACT FROM THE TAX PAYABLE U/S. 115JB IS DULY SUPPORTED BY THE CASE LA WS AS MENTIONED HEREINABOVE. HOWEVER, IN THE PRESENT CASE, WE NEE D NOT GO TO THE ALTERNATIVE SUBMISSIONS, AS WE HAVE ALREADY HELD TH AT THE PROVISIONS OF SECTION 115JB OF THE ACT ARE NOT APPLICABLE IN THE INSTANT CASE, AS THE TAX PAYABLE UNDER THE NORMAL PROVISIONS OF THE ACT A RE MORE THAN 10% OF THE BOOK PROFIT. ACCORDINGLY, WE DO NOT FIND AN Y MERIT IN THE REVENUE APPEALS. ACCORDINGLY, WE DISMISS BOTH THE R EVENUE APPEALS. ITA NOS. 2224/DEL/2011 & 711/DEL/2012 AND C.O. NO. 98/DEL/2012 8 14. SINCE WE HAVE ALREADY DISMISSED THE REVENUE APPE ALS AS ABOVE, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED AS SUCH. 15. IN THE RESULT, BOTH THE REVENUES APPEALS AND ASSESSEES CROSS OBJECTION STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29/11/2013. SD/- SD/- [ [[ [I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR I.C. SUDHIR] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE:- 29/11/2013 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NOS. 2224/DEL/2011 & 711/DEL/2012 AND C.O. NO. 98/DEL/2012 9