2015 (4) TMI 441 - HC - Income Tax

Rebate under section 88E - Tribunal allowing the rebate of ₹ 1.01 crores under section 88E against the rebate of ₹ 75.07 lacs allowed by the Assessing Officer - Held that - When the income from the securities transactions is taxable and offered to tax, the deduction insofar as that sum is concerned or quantum has been granted. We do not think that the Tribunal's order can be interfered with. The Tribunal's view is imminently possible in the backdrop of the facts and circumstances peculiar to the Assessee. In any event by sub-section (3) of section 88E it has been clarified that no deduction under section 88E shall be allowable in, or after, the assessment year beginning on the 1st day of April, 2009 i.e. because a deduction which is contemplated by this provision has been now made admissible elsewhere. In these circumstances, the Appeal raises no substantial question of law. It is dismissed. More so when the Tribunal's order has been given effect to by the Assessing Officer. He has followed his view taken in the assessment year 2006-07, which is also following the Tribunal's order. - Decided against revenue.

Summary

Issues:
Challenge to Tribunal's order allowing rebate under section 88E of the Income Tax Act, 1961 against Assessing Officer's allowed rebate.

Analysis:
1. Facts and Arguments: The appellant challenged the Tribunal's order allowing a rebate of Rs. 1.01 crores under section 88E, contrary to the Rs. 75.07 lacs allowed by the Assessing Officer. The appellant contended that the rebate was not granted as per the section's entitlement, citing a brought forward loss set off against the income from taxable securities.

2. Assessing Officer's Decision: The Assessing Officer calculated the rebate at Rs. 75,07,274, considering the brought forward loss from the previous year. The appellant argued that the deduction under section 88E should not consider brought forward losses and should be granted in full based on the taxable securities transactions.

3. Tribunal's Decision: The Tribunal referred to previous judgments and upheld the Assessee's entitlement to a rebate of Rs. 1.01 crores under section 88E. It emphasized that the deduction should be based on the income from taxable securities transactions without considering brought forward losses.

4. Appellant's Contentions: The appellant argued that the Tribunal erred in its decision by not considering the clear language of section 88E, which does not allow for the consideration of brought forward losses in calculating the rebate. The appellant insisted on upholding the Assessing Officer's calculation, as per the provisions of the Act.

5. Respondent's Arguments: The respondent contended that the Tribunal correctly applied the provisions of section 88E, granting the necessary deduction based on the income from taxable securities transactions. It was emphasized that the deduction should be computed as per sub-section (2) without reducing it due to brought forward losses.

6. Conclusion: The High Court upheld the Tribunal's decision, emphasizing that the deduction under section 88E should be based on the income from taxable securities transactions without considering brought forward losses. The Court clarified that the deduction is allowable only on the income from taxable securities transactions, and the Tribunal's order was in line with the clear language of the provision. The Appeal was dismissed as it did not raise any substantial question of law, and the Tribunal's order was deemed correct and in accordance with the Act.