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2019 (6) TMI 473 - AT - Income TaxRebate u/s 88E - Rebate in respect of securities transaction tax - claim admissible in respect of income of an assessee, chargeable under the head “Profits and gains of business or profession”, arising from taxable securities transaction. restriction of claim by CIT-A - allocation of expenses towards incomes on which rebate U/s 88E not allowed to the assessee - HELD THAT:- There is no ambiguity regarding statutory provisions U/s 88E, to the extent that rebate u/s 88E is admissible to the assessee only in respect of the income of an assessee in a previous year, chargeable under the head “Profits and gains of business or profession”, arising from taxable securities transactions. Orders of the lower authorities, CIT(A) and AO, restricting the rebate u/s 88E to income chargeable under the head “Profits and gains of business or profession”, arising from taxable security transaction, is upheld. The assessee’s claim to allocate expenses against such incomes which had been excluded from the profits of the business in computing rebate u/s 88E is a reasonable claim. Merely, because income on which rebate U/s 88E was not allowable was only 3.32% of the total income, such allocation of expenses cannot denied. The opinion expressed by the AO as well as Ld. CIT(A) that such incomes would not require expenditure of substantial amounts is not based on any credible materials. Neither the AO nor the CIT(A) has supported this view, on the basis of facts of the case. We disapprove this approach adopted by the AO and CIT(A), in refusing to allocate any expenses towards incomes on which rebate u/s 88E was not allowed to the assessee. Direct the AO to allocate expenses to incomes on which rebate u/s 88E has been denied to the assessee and re-compute the rebate U/s 88E, accordingly. For this limited purpose, we are setting aside the order of the Ld. CIT(A) and remanding the matter to the file of the AO. - Appeal of the assessee is partly allowed for statistical purposes
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