2013 (11) TMI 108 - AT - Income Tax

Rebate u/s 88E deduction of STT paid from the income tax computed u/s 115JB at book profit - Held that - Following DCIT vs. M/s. MBL & Co. Ltd. 2011 (4) TMI 1312 - ITAT DELHI The assessee is entitled to a deduction of the amount equal to the STT paid by him in respect of the taxable Securities Transactions entered into in the course of business during the previous year The rebate is 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 of the Income Tax Act, 1961 does not differentiate between the total income computed under the regular provisions of the Act or under section 115JB of the Income Tax Act, 1961 - Rebate u/s 80E available to the assesse Decided against Revenue.

Summary

Issues: Appeal against CIT (Appeals) order for assessment year 2007-08 - Whether tax u/s 115JB should be charged on book profit - Rebate u/s 88E allowable on book profit.

Analysis:
1. The appeal by the revenue challenged the CIT (Appeals) order for the assessment year 2007-08, specifically regarding the direction not to charge tax u/s 115JB on the book profit of Rs. 3,48,42,560.

2. The assessee, a registered broker under SEBI engaged in share trading, had the return processed under section 143(1) in 2009, followed by scrutiny assessment under section 143(3) in 2009. The AR contended that the issue was covered by a decision of ITAT, Delhi Bench 'E' in a specific case and argued for the allowance of rebate under section 88E for tax liability computation.

3. The ITAT, after hearing both sides, held that the issue was indeed covered by a previous decision. Referring to the decision of ITAT, Bangalore 'A' Bench, the ITAT emphasized the computation of total income under regular provisions and section 115JB of the Income Tax Act, 1961. It was noted that the rebate u/s 88E should be granted from the income tax chargeable on the total income, without differentiation between regular provisions and section 115JB. The ITAT upheld the appeal, directing the Assessing Officer to allow the rebate under section 88E for the STT paid by the assessee.

4. Considering the arguments, the ITAT upheld the order of CIT (A) based on the provisions of the Income Tax Act and the prescribed form for filing the return of income. The ITAT dismissed the revenue's appeal, affirming the direction not to charge tax u/s 115JB on the book profit and allowing the rebate u/s 88E for the STT paid by the assessee.

This detailed analysis of the judgment highlights the key legal issues, arguments presented, and the ITAT's decision based on precedent and statutory provisions, ensuring a comprehensive understanding of the case.