2011 (10) TMI 489 - HC - Income Tax

Rebate u/s 88E from the tax computed u/s 115JB - assessee engaged in the business of purchase and sale of shares STT paid Held that - If the transaction on which STT is paid is included in the total income of the assessee where the total income is assessed either under the provisions of the Act or under Section 115JB when tax chargeable on such income is arrived at & 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 legislative intent of giving deduction of the tax already paid - Decided against the Revenue.

Summary

Issues:
- Delay in preferring the appeal
- Challenge to the order granting rebate under Section 88E for Securities Transaction Tax (STT) paid by the assessee
- Interpretation of Sections 87 and 88E in relation to the computation of income tax under Section 115JB
- Applicability of rebate under Section 87 to assessments made under Section 115JB

Delay in Preferring the Appeal:
The judgment begins by addressing a delay of two days in preferring the appeal, which the respondent does not object to. The court accepts the cause shown in the affidavit and condones the delay.

Challenge to the Order Granting Rebate under Section 88E:
The revenue challenges the order passed by the Tribunal, which allowed the assessee's appeal and granted a rebate under Section 88E for the STT paid by the assessee. The revenue contends that rebate under Section 87 is applicable only if an assessment is made under provisions other than Section 115JB. The Tribunal held that the assessee is entitled to a deduction equal to the STT paid in respect of taxable Securities Transactions under Section 88E, even when the total income is computed under Section 115JB.

Interpretation of Sections 87 and 88E:
Sections 87 and 88E provide for rebate in computing income tax. The court analyzes the language of these sections and concludes that the provisions do not specify the applicability to the computation of income tax under any particular provision of the law. The court delves into legal definitions of "rebate" and emphasizes that the legislative intent is to give a deduction of tax already paid under Section 88E by way of rebate under Section 87.

Applicability of Rebate under Section 87 to Assessments under Section 115JB:
The court clarifies that when the total income is assessed and tax chargeable is computed, the tax paid under Section 88E is given deduction as a rebate under Section 87, irrespective of whether the assessment is under regular provisions of the Act or under Section 115JB. The judgment emphasizes that the legislative intent is to avoid double taxation and ensure that tax already paid is handed back at the time of final computation. The court dismisses the appeal, stating that the Tribunal's decision aligns with the law and does not warrant interference.

In conclusion, the judgment provides a detailed analysis of the issues related to the rebate under Section 88E for STT paid by the assessee, emphasizing the legislative intent to prevent double taxation and ensure fair computation of income tax.