TMI Blog2014 (1) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... e for rebate under section 88E, even if the assessment is to be made after computing the book profit under section 115JB – validity of re-opening under section 147 is purely an academic thus, not discussed - Decided against Revenue. - ITA No. 6019/Mum./2011, ITA No. 6022/Mum./2011 - - - Dated:- 22-1-2014 - Shri P. M. Jagtap And Shri Amit Shukla,JJ. For the Petitioner : Mr. Prakash K. Jothwani For the Respondent : Mr. Surendra Kumar ORDER Per Amit Shukla, J. M. The aforesaid appeals have been preferred by the Revenue, challenging the impugned order dated 20th June 2011 and 21st June 2011, passed by the learned Commissioner (Appeals)-IV, Mumbai, for the quantum of assessment passed under section 143 r/w 147 for the assessment year 2007-08 and 2008-09 respectively. 2. Since the grounds raised by the Revenue in both the years under appeal are common, therefore, these appeals were heard together and, as a matter of convenience, are being disposed off by way of this consolidated order. However, in order to understand the implication, it would be necessary to take note of facts of one appeal. We are, accordingly, stating the facts as they appear in ITA no.6019/Mum. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stly, no income has escaped assessment, as the assessee was not liable to pay tax under section 115JB, as the tax under normal provision was much higher than the tax under section 115JB and it was shown that the tax payable on the normal income was Rs. 3,07,49,103, whereas, the tax payable under section 115JB was Rs. 1,02,75,572. Secondly, the assessee is also liable for rebate under section 88E for Rs. 3,07,49,103, as it has paid security transaction tax. However, the Assessing Officer rejected the assessee's contention and computed the income as per section 115JB and denied the relief claimed under section 88E on the ground that the same is not allowable under the provisions of MAT. 4. Before the learned Commissioner (Appeals), detail submissions were made along with objections raised for re-opening the case under section 147. The learned Commissioner (Appeals) appreciated the assessee's contention and after analyzing the assessee's computation of income, observed that the assessee was liable to compute tax under the normal provisions and not under section 115JB, because the tax payable under the normal provision was higher. He held that, first of all the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . deserves to be quashed." 5. On the second aspect whether rebate under section 88E is allowable while computing book profit under section 115JB, he held that without prejudice, the assessee is liable for claim for deduction under section 88E even when the computation is made under section 115JB. The relevant findings of the learned Commissioner (Appeals) in this regard are as under:- 12. There is no dispute on the fact that STT has been paid and other formalities have been complied with. The A.O. has only held that rebate u/s. 88E is not allowed when the income is taxed u/s. 115JB. Even though sub-section (1) of section 115JB starts with the nonabstante clause it is only for computation of taxable income and it has no role as far as allowing of rebate u/s. 88E is concerned. On the contrary sub- section (5) of section 115JB provides for a saving clause that the rest of the provisions of the Act shall apply and, therefore, the provisions relating to deduction and rebate etc. will apply. Section 88E does not prescribe any condition that such rebate will not be allowed if the income is assessed u/s. 115JB, whereas section 88E clearly says that the assessee shall be entitled to a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout giving relief under section 88E. Prima-facie, on the first issue whether the income is to be computed under section 115JB and the assessment is to be made under MAT provisions or not, we uphold the view of the learned Commissioner (Appeals) that the provisions of section 115JB was not applicable as the tax on normal computation was higher. Secondly, the other main point whether the relief / rebate under section 88E is available on the computation under section 115JB or not, has been decided by the Karnataka High Court in Horizon Capital Ltd. (supra), which has been followed by the Tribunal, Mumbai Bench in Shreepati Holdings and Finance Pvt. Ltd. (supra). The relevant observation of the Hon'ble High Court is as under:- "14. Under section 88E, where the total income of an assessee in a previous year includes any income, chargeable under the head 'Profits and gains of business of profession', arising from taxable securities transactions, he shall be entitled to a deduction, from the amount of income-tax on such income arising from such transactions section also provides the limit to which deductions shall be given. 15. Therefore, it is clear that. the assessee is liable to p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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