2013 (10) TMI 1223 - HC - Income Tax

Whether rebate under Section 88E in respect of securities transaction tax is admissible in a case where the income is assessed under the concept of minimum alternative tax under Section 115 JB of the Income Tax Act Held that - Reliance has been placed on the Commissioner of Income Tax vs. M/s. Horizon Capital Ltd. 2011 (10) TMI 489 - KARNATAKA HIGH COURT , wherein it was held that contention that this benefit is not available to the assessee whose total income is assessed under Section 115JB has no substance - When the total income is assessed and the tax chargeable is computed, it is from that tax which is chargeable, the tax paid under Section 88E is given deduction, by way of rebate, under Section 87 of the Act. This is the legislative intent. That is a promise to give deduction of the tax already paid Decided against the Revenue.

Summary

Issues:
1. Admissibility of rebate under Section 88E for securities transaction tax when income is assessed under minimum alternative tax under Section 115 JB of the Income Tax Act.

Analysis:
The High Court of Calcutta, comprising of Girish Chandra Gupta and Tarun Kumar Das, JJ., deliberated on the issue of whether a rebate under Section 88E for securities transaction tax is permissible when income is evaluated under the minimum alternative tax regime of Section 115 JB of the Income Tax Act. During the proceedings, Mr. Khaitan, a learned senior advocate, referred to a judgment from the Karnataka High Court in the case of 'The Commissioner of Income Tax vs. M/s. Horizon Capital Ltd.' The Karnataka High Court's ruling emphasized that the benefit of rebate under Section 88E is indeed available to assesses whose total income is assessed under Section 115JB. The Karnataka High Court's interpretation highlighted that the tax paid under Section 88E is deductible from the tax chargeable, as per Section 87 of the Act, reflecting the legislative intent to provide a deduction for the tax already paid during the final computation process.

The Calcutta High Court, concurring with the reasoning and conclusions of the Karnataka High Court, affirmed that the views expressed by the Karnataka High Court are logical and acceptable. Consequently, the court answered the questions posed in the appeals in alignment with the Karnataka High Court's interpretation. As a result, both appeals were disposed of based on the understanding that the rebate under Section 88E for securities transaction tax is indeed admissible even when the income is assessed under the minimum alternative tax framework of Section 115 JB. The court further directed the issuance of an urgent xerox certified copy of the order upon application by the concerned parties, subject to fulfilling all necessary formalities.