IN THE INCOME TAX APPELLATE TRIBUNAL
"F" Bench, Mumbai
Before Shri D. Manmohan, Vice President
and Shri D. Karunakara Rao, Accountant Member
ITA No. 2271/Mum/2012
(Assessment Year: 2008-09)
ACIT, Circle 4(2) M/s. Visaria Securities P. Ltd.
Room No. 642, 6th Floor Vs. 301-A, Commerce House
Aayakar Bhavan, M.K. Road 140 N.M. Road, Fort
Mumbai 400020 Mumbai 400023
PAN - AAACV7721L
Appellant Respondent
Appellant by: Shri S. Ghosh
Respondent by: Shri Anuj Kisnadwala
Date of Hearing: 10.09.2013
Date of Pronouncement: 10.09.2013
ORDER
Per D. Manmohan, V.P.
This appeal by the Revenue is directed against the order passed by the
CIT(A)-8, Mumbai and it pertains to A.Y. 2008-09.
2. The following grounds were urged by the Revenue: -
"1. i) On the facts and in the circumstances of the case and in law,
the Ld. CIT(A) erred in allowing the rebate u/s. 88E from the tax
payable on book profit.
ii) On the facts and in the circumstances of the case and in law,
the Ld. CIT(A) erred in allowing Rebate u/s. 88E while
computing tax liability under the MAT provision and in making
the comparison between the tax determined under the normal
provision of the I.T. Act and provision u/s. 115JB for the purpose
of determining applicability of the provisions of section 115JB on
gross before allowing Rebate u/s. 88E of the Income Tax Act,
1961.
2. On the facts and in the circumstances of the case and in law, the
impugned order of the Ld. CIT(A) is contrary to law to be set
aside and that of the Assessing Officer be restored."
3. Facts necessary for disposal of the appeal are stated in brief. Assessee
is a private limited company engaged in the business of share broking and
2 ITA No. 2271/Mum/2012
M/s. Visaria Securities P. Ltd.
share trading. For the year under consideration it declared total income of
`9,09,97,890/- under the normal provisions of the Act and the same was
processed accordingly. Later on the case was selected for scrutiny wherein
the AO made certain disallowances and also calculated the tax liability
under MAT provisions. However, while deciding the tax liability the AO
compared the tax liability under the normal provisions after considering the
rebate under section 88E with the tax liability under MAT provisions without
considering the rebate under section 88E. Because of such calculation the
tax liability under MAT provisions was higher than the tax computed on the
income calculated under normal provisions of the I.T. Act. According to the
assessee it was entitled to rebate under section 88E even while computing
the tax liability under MAT provisions and hence an appeal was preferred
before the CIT(A). Reliance was placed upon various decisions of the ITAT to
submit that rebate under section 88E of the Act is available even while
computing the tax under MAT provisions (115JB of the Act).
4. The learned CIT(A) accepted the contentions of the assessee by
observing, in para 4.3 of the order, as under: -
"4.3 I have considered the contention of the AO as well as of the Ld. AR. I
find that identical issue has been decided by the Hon'ble Tribunal. In the
cases of M/s. Horizon Capital ltd. and M/s. MBL & Co. Ltd. (Supra),
under identical fact that the present assessee had also made payment of
STT and it's total income included income from transactions on which STT
was paid. The only reason stated by the AO for not allowing rebate u/s.
88E from tax payable u/s. 115JB or computing tax payable under normal
provisions after reducing the amount of rebate u/s. 88E from such tax for
comparing the tax payable normally or u/s. 115JB are that STT was not
income tax and provisions of section 115JB were non-obstante deeming
fictions. Further identical to the contentions raised by the appellant, it was
submitted before the Hon'ble Tribunal in the case of M/s. Horizon
Capital Ltd. (Supra), that Form No. 6 the format of Income tax return
prescribed by the Department of Income tax provided for rebate u/s. 88E
from higher of income tax under regular provisions of the act or under
section 115JB of the Act. Thus, I find that the relevant facts and
circumstances as well as the statements and arguments of both the
assessee and the Department in the cases of M/s. Horizon Capital Ltd.
& M/s. MBL & Co. Ltd. (Supra), were identical to those in the instant
case of the appellant. The decision in the case of M/s. Horizon Capital
Ltd. & M/s. MBL & Co. Ltd. (supra) therefore, are clearly applicable in
the instant case which being the decision of a superior judicial authority is
binding for deciding identical issue under identical facts and
circumstances. Further, it has been pointed by the appellant that same
3 ITA No. 2271/Mum/2012
M/s. Visaria Securities P. Ltd.
view has been pronounced in order dated 02.07.2010 in appeal No.
CIT(A)-41/ACCC-37/IT-601/09-10 in the name of Naman Securities &
Finance Pvt. Ltd. in which it has been observed that it was clear from
ITR 6 that where tax payable works out under normal provisions of Act or
under MAT u/s. 115JB whichever is higher, the rebate u/s. 88E is to be
allowed to the appellant that there was no prohibition in claiming rebate
in respect of securities transaction tax paid against income tax payable
under MAT under provisions of section 115JB of the Income tax.
Respectfully following the decision in the cases of M/s. Horizon Capital
Ltd. & M/s. MBL & Co. Ltd. (supra), rendered by the Hon'ble Bangalore
and Delhi Tribunals respectively, I am of the opinion that comparison
between tax determined under normal provisions of the income tax act
and that determined under section 115JB shall be made for the purpose
of determining applicability of the provisions of section 115JB, on gross
basis before allowing rebate u/s 88E from the income tax determined
under normal provisions of income tax Act and rebate u/s 88E would also
be available to the assessee against the tax payable u/s. 115JB of the
Income tax Act. The appellant shall be required to make payment of higher
of the two amounts. Such proposition is inevitable from the format of the
Return of Income (ITR-6) as prescribed. The appeal on these grounds is
allowed.
5. Aggrieved, Revenue is in appeal before us. At the time of hearing the
learned counsel for the assessee strongly relied upon the judgement of the
Hon'ble Karnataka High Court in the case of CIT vs. Horizon Capital Ltd.
245 CTR (Kar) 601 wherein the same issue was decided in favour of the
assessee.
6. The learned D.R. strongly supported the order passed by the AO. He
could not place before us any decision of any High Court/Supreme Court
wherein a contrary view was taken. Under these circumstances we are of the
view that the order passed by the learned CIT(A), on this issue, does not call
for any interference.
7. In the result, as pronounced in the open court, the order passed by
the CIT(A) is affirmed and the appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 10th September, 2013.
Sd/- Sd/-
(D. Karunakara Rao) (D. Manmohan)
Accountant Member Vice President
Mumbai, Dated: 10th September, 2013
4 ITA No. 2271/Mum/2012
M/s. Visaria Securities P. Ltd.
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A) VIII, Mumbai
4. The CIT IV, Mumbai City
5. The DR, "F" Bench, ITAT, Mumbai
By Order
//True Copy//
Assistant Registrar
ITAT, Mumbai Benches, Mumbai
n.p.
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