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TMI Blog2013 (5) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax deductions of the amount, which he has paid under section 88E by virtue of Section 87. When under Section 82A, the assessee is made liable to pay tax with an assurance that it will be deducted and Section 87 gives effect to such promise made under the statute. That is the reason why the word used to rebate. The amount paid is handed back to the assessee. Thus 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 under Section 115JB has no substance. As 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 legislative intent. That is a promise to give deduction of the tax already paid. This is the mode in which tax already paid is handed back at the time of final computation. Therefore, the judgment referred by the Tribunal i.e. CIT V/S Horizon Capital Ltd. [2011 (10) TMI 489 - KARNATAKA HIGH COURT] strictly in accordance with law and does not called for interference. No substantial question of law involved in this appeal - In favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e return filed by the assessee was taken up for scrutiny and the Assessing Officer framed an assessment calculating the tax on book profits under Section 115JB of the Act at Rs. 39,09,336/-. The Assessing Officer further declined to admit any rebate under Section 88E of the Act as he was of the view that rebate under Section 88E of the Act could only be claimed on the tax payable as per normal computation under the Act and this rebate was not available on the tax as computed under Section 115JB of the Act. 5. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before CIT(Appeals). The CIT(Appeals) passed an order dated 25.06.2010, inter-alia, allowing the challenge preferred by the assessee with regard to the rebate under Section 88E of the Act. The CIT(Appeals) held that a taxing statute needs to be interpreted strictly and there was nothing in the language of Section 88E of the Act that limited the availability of rebate only on the tax as calculated under the normal provisions of the Act. The revenue preferred an appeal before the Income Tax Appellate Tribunal. The Tribunal also did not accept the contention on behalf of the revenue that rebate under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the rival contentions, it is appropriate to quote the relevant provisions of the Act. Section 115JB, Section 87 and Section 88E of the Act are quoted below:- ''115JB Special provision for payment of tax certain companies - (1) Notwithstanding anything contained in any other provision of this Act, where in the case of an assessee, being a company, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April, 2007, is less than ten per cent of its book profit, [such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of ten per cent].'' xxxx xxxx xxxx xxxx xxxx 87 - Rebate to be allowed in computing income-tax - (1) In computing the amount of income-tax on the total income of an assessee with which he is chargeable for any assessment year, there shall be allowed from the amount of income-tax (as computed before allowing the deductions under this Chapter), in accordance with and subject to the provisions of sections 88, 88A, 88B, 88C, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies pay some tax. this does not seem to have helped and is being withdrawn. I now propose to introduce a provision whereby every company will have to pay a ''minimum corporate tax'' on the profits declared by it in its own accounts. Under this new provision, a company will pay tax on at least 30 percent of its book profit. In other words, a domestic widely held company will pay tax of at least 15 percent of its book profit. This measure will yield a revenue gain of approximately Rs 75 crores.'' The MAT scheme was improvised further and section 115JB was introduced in the Act by the Finance Act, 2000 w.e.f. 01.04.2001. At the material time, the rate of MAT was prescribed at 7.5%. The purpose of introducing the MAT scheme was to tax profitable companies who otherwise were not liable to pay tax on account of various deductions and higher depreciation available to them in computing the taxable income under the normal provisions of the Act. The import of Section 115JB of the Act is to provide an alternative method of computation of tax by accepting the book profits as shown by the assessee, albeit with certain adjustments as specified in Explanation 1 of Section 115JB (2) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income tax payable by him on the total income of the assessee. There is a clear distinction in the scope of chapter VIIIA of the Act and other provisions which specify deductions that are available to an assessee in computing his total income. Whereas deductions allowed in computing the total income are a part of the machinery section to determine the total income of the assesse, the rebates under the Chapter VIIIA of the Act provide for certain deductions from the tax payable as computed on the total income of an assessee. 10. Section 115JB of the Act provides for computation method for determining the total income of an assessee as an alternative to the total income as computed under Chapters IV, V, VI, VIA of the Act and under other provisions of the Act. Section 115JB also specifies the rate at which tax is payable on the income as determined under the said section. Section 88E provides for remission of tax to the extent of Securities Transaction Tax as paid by the assesse provided the condition specified therein is satisfied, namely, the income of the assessee includes income chargeable under the head Profits and gains of business or profession , arising from taxable secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income is assessed either under the provisions of the Act or under Section 115JB when tax chargeable on such income is arrived at, he is given the benefit of tax deductions of the amount, which he has paid under section 88E by virtue of Section 87. When under Section 82A, the assessee is made liable to pay tax with an assurance that it will be deducted and 87 of the Act gives effect to such promise made under the statute. That is the reason why the word used to rebate. The amount paid is handed back to the assessee. In other words, payment of tax twice on the same income is avoided. 17. Therefore, the contention that this benefit is not available to the assessee whose total income is assessed under Section 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 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. This is the mode in which tax already paid is handed back at the time of final computation. Therefore, the judgment referred by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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