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TMI Blog2015 (8) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... a High Court ), are in favour of the assessee, we decide this issue in favour of the assessee and against the revenue Rebate u/s. 88E - Whether CIT(A) erred in allowing rebate u/s. 88E even though the income is assessed u/s. 115JB? - Held that:- The issue is now settled in favour of assessee that rebate u/s. 88E of the Act will be allowed even though the income is to be assessed u/s. 115JB of the Act. See Commissioner of Income-tax Versus Horizon Capital Ltd. [2011 (10) TMI 489 - KARNATAKA HIGH COURT ] - Decided against revenue. - ITA No. 789/Kol/2012 - - - Dated:- 22-5-2015 - P K Bansal, AM And Mahavir Singh, JM,JJ. For the Appellant : Shri Kalyan Nath, JCIT For the Respondent : Shri Subash Agarwal, Adv. ORDER Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of ₹ 750/-, being arising out of investment of ₹ 2 lakh and the other shares are stock-in-trade only. According to Ld. Counsel, this issue is now covered by the decision of Hon'ble Kerala High Court in the case of CIT Vs. Leena Ramachandran (2011) 339 ITR 296 (Ker), wherein it has been held as under: Held, allowing the appeal, that any expenditure incurred for earning any income which was not taxable under the Act was not an allowable expenditure. Dividend income was exempt under section 10(33) of the Act and the dividend earned by the assessee on the shares acquired by her with the borrowed funds did not constitute part of the total income in the hands of the assessee. The reasoning given by the Tribunal for disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elded dividend, for which, the assessee has not incurred any expenditure at all. Though the dividend income is exempted from payment of tax, if any expenditure is incurred in earning the said income, the said expenditure also cannot be deducted. But in this case, when the assessee has not retained shares with the intention of earning dividend income and the dividend income is incidental to his business of sale of shares, which remained unsold by the assessee, it cannot be said that the expenditure incurred in acquiring the shares has to be apportioned to the extent of dividend income and that should be disallowed from deductions. In that view of the matter, the approach of the authorities is not in conformity with the statutory provisions c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T u/s. 115JB of the Act. 7. At the outset, it is to be mentioned that even though the income is computed u/s. 115JB of the Act rebate u/s. 88E of the Act is to be allowed while computing the tax. The CIT(A) relying on the decision of Hon'ble Karnataka High Court in the case of CIT Vs. M/s. Horizon Capital Ltd., ITA No. 434 of 2010, Misc. CVL 6629 of 2011 dated 24.10.2011 reported in (2012) 17 Taxmann 8 (Kar), wherein the following view was taken: 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 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This is the mode in which tax already paid is handed back at the time of final computation. We are of the opinion that the views expressed by the Karnataka High court are reasonable and are also adopted by us. The questions are accordingly answered. Both the appeals are thus disposed of. It means that the issue is now settled in favour of assessee that rebate u/s. 88E of the Act will be allowed even though the income is to be assessed u/s. 115JB of the Act. Accordingly, we find no infirmity in the order of CIT(A) and the same is hereby upheld. This issue of revenue's appeal is dismissed. 9. In the result, appeal of revenue is dismissed. 10. Order is pronounced in the open court on 22.5.2015. - - TaxTMI - TMITax - Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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