Income Tax Appellate Tribunal - Mumbai
Dcit 4(1)(1), Mumbai vs Asit C.Mehta Investment Intermediates ... on 17 February, 2017
आयकर अपीलीय अधिकरण "ए " न्यायपीठ मुंबई में।
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "A", MUMBAI BEFORE SHRI CN PRASAD, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO. 1919/MUM/2015 : (A.Y : 2007-08) DCIT 4(1)(1) Vs. Shri Asit C Mehta Investment R.No.640, 6th Floor Intermediates P. Ltd.
Aaykar Bhavan 5th Floor, Nucleus House
M.K.Road Saki Vihar Road
Mumbai - 400 020 Andheri (East)
Mumbai - 400 072
PAN : AAACA5009N
(अपीलार्थी / Appellant) (प्रत्यर्थी / Respondent)
अपीलार्थी की ओर से / Appellant by : Shri Vaibhav Jain
प्रत्यर्थी की ओर से Revenue by : Shri Satish A Mody
सुनवाई की तारीख / Date of Hearing : 23/11/2016 घोषणा की तारीख Date of Pronouncement : 17/02/2017 आदे श / O R D E R PER C.N.PRASAD (J.M.) :
This appeal is filed by the revenue against the order of the Ld. CIT (Appeals)-9, Mumbai dated 29.01.2015 for the assessment year 2007-08 arising out of the assessment order u/s 143(3) r.w.s.147 of the Act.2
M/s Asit C Mehta Investment Intermediates Pvt. Ltd.ITA No.1919/Mum/2015
2. The only issue in the appeal of the assessee is that the Ld.CIT (Appeals) erred in directing the assessing officer to allow rebate u/s 88E of the Act while computing the tax liability u/s 115JB of the Act.
3. Briefly stated the facts are that the assessing officer while completing the assessment u/s 143(3) r.w.s. 147 of the Act by order dated 09.11.2012 denied rebate u/s 88E while computing the book profits u/s 115JB of the Act on the ground that payment of securities transaction tax allowed as rebate u/s 88E cannot be equated with income tax. Therefore, he denied the rebate u/s 88E to the assessee. On appeal, the ld CIT (Appeals) following the decisions of Karnataka High Court in the case of Horizon Capital Ltd and the Delhi High Court in the case of MBL & Co. Ltd and Multiplex Capital Ltd. allowed the claim of the assessee.
4. The ld. DR supported the orders of the assessing officer in denying rebate u/s 88E while computing books profits u/s 115JB of the Act to the assessee.
5. The ld. Counsel for the assessee strongly placed reliance on the orders of the ld. CIT (Appeals) and the decisions of the Hon'ble Karnataka and Delhi High Court on the issue and submitted that the issue is squarely covered by the said decisions.
3M/s Asit C Mehta Investment Intermediates Pvt. Ltd.
ITA No.1919/Mum/20156. We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. We find from the assessment order that rebate u/s 88E was denied by the assessing officer on the ground that such rebate u/s 88E claimed on account of STT cannot be equated with income tax payment. We find that similar issue has come up before Hon'ble Karnataka High Court and also the Delhi High Court, wherein the issue was decided in favour of the assessee and the ld. CIT (Appeals) following these decisions allowed the claim of the assessee observing as under :
"3.2 I have carefully considered the facts of the case, order passed and the submissions made by the appellant. It is seen that in this case, the only dispute in the present appeal is as to whether rebate u/s. 88E of the Act is allowable in computing income u/s. 115JB of the Act. The issue has been decided by the Hon'ble Karnataka High Court in the case of Horizon Capital Ltd. (2011) 64 DTR (Kar) 306. The Hon'ble Karnataka High Court has held as under :-
"Under s. 88E, where the total income of an assessee in a previous year includes any income, chargeable under the head "Profits and gains of business or profession ", arising from taxable securities transactions, he shall be entitled to a deduction, from the amount of income tax on such income arising from such transaction. Section also provides the limit to which deductions shall be given. Therefore, it is clear that the assessee is liable to pay STT when he enters into Securities transaction. Tax is payable simultaneously after realizing the consideration. However, if that transaction is included in the total income of the assessee, where the total income is assessed either under the provisions of the Act or u/s. 115JB, when tax chargeable on such income is arrived at, he is given the 4 M/s Asit C Mehta Investment Intermediates Pvt. Ltd.ITA No.1919/Mum/2015
benefit of tax deductions of the amount, which he has paid u/s. 88E by virtue of Sec.87. When the assessee is made liable to pay tax with an assurance that it will be deducted and Sec.87 gives effect to such promise made under the statute, that is the reason, why the word used is rebate. The amount paid is handed back to the assessee. In other words, payment of tax twice on the same income is avoided. Therefore, the contention that this benefit is not available to the assessee whose total income is assessed u/s 115JB has no substance. In other words, when the total income is assessed and the tax chargeable is computed, it is from that tax which is chargeable, the tax paid u/s 88E is given deduction, by way of rebate, u/s. 87. This is the mode in which tax already paid is handed back at the time final computation. No substantial question of law is involved in this appeal."
3.3 Similarly, Hon'ble Delhi High Court in the case of CIT Vs. (1) MBL & Co. Ltd. (ITA No. 1181 of 2011) and (2) Multiplex Capital Ltd. (ITA No. 573 of 2012) - [2013] 358 ITR 1 (Delhi) has held as under :-
"Rebate u/s. 88E of the Act provides for certain rebates available on the tax payable by an assessee. There would be no rationales to limit the plain words of Sec.88E of the Act and hold that the rebate in payment of the tax is only applicable to tax as determined under the normal provisions of the Act and not with respect to the MAT as computed u/s. 115JB. The purpose of Sec.88E of the Act is to grant an assessee, to a limited extent, credit in tax on account of STT already borne by him in respect of the business carried out by him in dealing in securities. This rebate would be equally applicable to tax as computed u/s. 115JB of the Act as under the normal provisions of the Act."
3.4 It is seen from the above decisions of the Hon'ble Karnataka High Court and Hon'ble Delhi High Court that rebate u/s. 88E is 5 M/s Asit C Mehta Investment Intermediates Pvt. Ltd.
ITA No.1919/Mum/2015allowable to the appellant while computing tax liability u/s.115JB of the Act. Respectfully following the decisions of Hon'ble Karnataka High Court and Hon'ble Delhi High Court, the AO is directed to allow rebate u/s. 88E of the Act while computing the tax liability u/s. 115JB of the Act. The ground of appeal, is thus treated as allowed."
7. On going through the orders of the ld.CIT (Appeals), we do not find any valid reason to interfere in the findings of the ld. CIT (Appeals) in allowing the claim of the assessee. The revenue also could not bring any contrary decision of the jurisdictional High Court before us. Therefore, respectfully, following the above decisions, we uphold the order of the ld. CIT (Appeals) and reject the grounds of appeal of the revenue.
8. In the result, appeal of the revenue is dismissed.
Order pronounced in the open court on the 17th day of February 2017.
Sd/- Sd/- MANOJ KUMAR AGGARWAL C.N.PRASAD ले खा सदस्य न्याधयक सदस्य ACCOUNTANT MEMBER JUDICIAL MEMBER
मुुंबई / Mumbai; दिनाुं क / Dated 17/02/2017 LR, SPS 6 M/s Asit C Mehta Investment Intermediates Pvt. Ltd.
ITA No.1919/Mum/2015आदे श की प्रधिधलधप अग्रे धिि / Copy of the Order forwarded to :
1. अपीलार्थी / The Appellant
2. प्रत्यर्थी / The Respondent.
3. आयकर आयुक्त(अपील) / The CIT(A), Mumbai.
4. आयकर आयुक्त / CIT
5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुुं बई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
सत्यादपत प्रदत //True Copy// आदे शानसार/ BY ORDER, सहायक पुं जीकार (Asstt. Registrar) आयकर अपीलीय अधिकरण, मुुं बई / ITAT, Mum