ITO 2(1)(3), MUMBAI V. GOPA INVESTMENT CO. (P) LTD, MUMBAI

ITA 8325/MUM/2011

• Counselvise Citation: 832519914 RSA 2011
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIJANAB JAVED AKHTAR
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G , MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER & SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.8325/MUM/2011 : ASST.YEAR 2008 - 2009 ASST. COMMISSIONER OF INCOME TAX - 2(1), AAYAKAR BHAVAN, R.NO. 561, 5 TH FLOOR, M.K. ROAD, MUMBAI - 400020 VS. M/S GOPA INVESTMENTS CO. PVT. LTD., 605, MAKER CHAMBER - 1, 220,JAMNADAS BAJAJ ROAD, NARIMAN POINT, MUMBAI - 400 020 PAN : AABCG3815F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI/JANAB JAVED AKHTAR RESPONDENT BY : MS. AASIFA KHAN DATE OF HEARING : 10 .0 2 .201 4 DATE OF PRONOUNCEMENT : 26 .02.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREF E R RED BY THE R EVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS CIT(A)] DATED 9.9.2011 . THE R EVENUE IS AGGRIEVED OF THE ACTION OF THE CIT(A) IN DIRECTING THE ASSESSIN G OFFICER (HEREINAFTER REFERRED TO AS AO) TO G IVE THE REBATE U/S. 88E OF THE INCOME TAX A CT IN RESPECT OF THE SECURITY TRANSACTION TAX PAID BY THE ASSESSEE AGAINST THE TAX COMPUTED U/S 115JB OF THE INCOME TAX ACT, 1961. 2. THE FACTS OF THE CASE ARE THAT TAXABLE IN COME FOR THE RELEVANT YEAR, IN THE CASE OF THE ASSESSEE, COMPUTED BY THE A.O. UNDER NORMAL PROVISIONS OF INCOME - TAX ITA NO. 8325/M/11 AY 2009 - 10 2 ACT COME OUT TO BE RS.15,01,300/ - ON WHICH TAX PAYABLE WAS RS.4,49,744/ - AND AFTER ALLOWING DEDUCTION U/S. 80E ON ACCOUNT OF SECURITY TRANS ACTION TAX (STT) OF RS.4,49,744/ - , THE NET TAX PAYABLE CAME OUT TO BE NIL. WHEREAS, BOOK - PROFIT WERE CALCULATED AT AS RS. 25,85,732/ - ON WHICH TAX @ 10% WAS CALCULATED AT RS.2,58,773/ - . A.O. THEREFORE HELD THAT NET TAX PAYABLE UNDER THE NORMAL PROVISIONS OF THE ACT AFTER DEDUCTION U/S. 80E ON ACCOUNT OF STT WAS NIL WHEREAS 10% OF BOOK - PROFIT OF RS.2,58,773/ - WAS HIGHER, THEREFORE, TAX WAS PAYABLE U/S. 115JB. HOWEVER HE HELD THAT NO BENEFIT OF STT WOULD BE ALLOWABLE WHILE COMPUTING TAX U/S. 115JB OF THE I.T. ACT. 3. IN APPEAL, THE LD. CIT(A) DIRECTED THE AO TO GIVE THE ADMISSIBLE REBATE TO THE ASSESSEE U/S 88E, WHILE FOLLOWING THE DECISION OF THE BAN G ALORE BENCH OF THE TRIBUNAL IN THE CASE OF HORIZON CAPITA L LTD. VS. ITO, BANG., ITA NO. 592/(BANG)/2010 DATED 16/7/2010, WHEREIN, IT HAS BEEN HELD THAT THE REBATE U/S 88E HAS 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 DOES NOT DIFFERENTIATE BETWEEN THE TOTAL INCOME COMPUTED UNDER THE REGULAR PROVISIONS OF THE ACT OR U/S 115JB. EVEN THOUGH THE SUB SECTION (1) OF SECTI ON 115JB STARTS WITH THE NON - O BSTANTE CLAUSE, 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 ACT RELATING TO DEDUCTIONS, REBATE, ETC . THE OTHER PROVISIONS OF THE IT ACT SHALL APPLY, THE PROVISION OF SECTIONS 87 AND 88A TO 88E ALSO A PPLY AFTER THE TOTAL INCOME IS COMPUTED U/S 115JB AND IN CASE THE ASSESSEES TOTAL INCOME INCLUDES THE INCOME FROM THE TAXABLE SECURITIES TRANSACTIONS, THE ASSESSEE WILL BE ENTITLED TO A DEDUCTION OF THE AMOUNT EQUAL TO THE STT PAID BY HIM IN RESPECT OF TH E TAXABLE SECURITIES TRANSACTIONS ENTERED INTO IN THE COURSE OF BUSINESS DURING THE PREVIOUS YEAR. ITA NO. 8325/M/11 AY 2009 - 10 3 4. B EFORE US, A T TH E OUTSET, LD AR OF THE ASSESSEE SUBMITTED THAT THE ABOVE DECISION OF THE TRIBUNAL HAS BEEN UPHELD BY THE HONBLE KARNATAKA HIGH COURT IN CIT VS. HORIZON CAPITAL LTD. [2011] 245 CTR 601. THE H ONBLE HIGH COURT HAS UPHELD THE FINDING OF THE TRIBUNAL THAT ASSESSEE IS ENTITLED TO REBATE U /S 88E IN RESPECT OF THE SECURIT I ES T RANSACTION TAX PAID EVEN WHERE THE TOTAL INCOME IS ASSESSED U/S 115 JB. RESPECTFULLY FOLLOWING THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT AS DISCUSSED ABOVE, THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. HOWEVER, AS HAS BEEN HELD BY THE CO - ORDINATE BENCHES OF THE TRIBUNAL IN THE CASE OF ARCADIA SHARE & STOCK BROKERS PVT. LTD. ITA NO. 1515/M/2012 DATED 20.3.2013 AND IN THE CASE OF M/S ABHIJIT SECURITIES B ROKING PVT. LTD. ITA NO. 7856/M /201 1DECIDED ON 6.2.13, THE REBATE U/S 88E WILL BE RESTRICTED ONLY AGAINST TH E TAX ARISING ON THE INCOME FROM SECURITY TRANSACTIONS AND TO ANY OTHER INCOME REPORTED BY THE ASSESSEE IN THE RETURN OF INCOME AND TO BE CALCULATED PROPORTIONATELY ACCORDINGLY. SUBJE CT TO ABOVE OBSERVATIONS, THE APPEAL OF THE R EVENUE IS HEREBY DISMISSED. ORDER P RONONCED IN THE OPEN COURT ON 26 . 02.2014 SD/ - SD/ - ( R.C. SHARMA ) ( SANJAY GARG ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 26 TH FEBRUARY, 2014 SA ITA NO. 8325/M/11 AY 2009 - 10 4 COPY FORWARDED TO : 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE C.I.T. CONCERNED MUMBAI 4 . THE CIT (A) CONCERNED MUMBAI 5 . THE DR, C - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI