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TMI Blog2014 (1) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. /2011, for the assessment year 2007-08. The grounds raised by he Revenue are as under:- "1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in quashing the reopening order of the A.O. when there was genuine escapement of income during the previous year. 2. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober 2009, at an income of Rs. 1,24,80,226, after making disallowance under section 14A of the Act. Thus, the income was assessed under the normal provisions of the Act and not under section 115JB. Thereafter, the said assessment was re- opened under section 147 on the ground that the assessee was liable to pay tax as per the provisions of section 115JB and rebate under section 88E is not allowable under book profit. The assessee raised objections before the Assessing Officer on the ground that firstly, 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or adjustment on account of advance tax or TDS is to be compared with 10% of the book profit. Even otherwise, had the net tax liability to be considered, then it will generally be higher than 10% of the book profit because most of the income-tax is paid either in the form of advance tax or TDS. Therefore, there is no doubt that the gross tax liability on the income under normal provisions of Act is to be compared with the 10% of the book-profit and if the gross tax liability on the income under the normal provisions of Income-tax Act is higher, than it is to be taxed under the normal provisions of the Act, otherwise the book-profits are to be taxed. Therefore, in the case of the assessee it is the income under normal provisions of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STT, is to be allowed. This decision of the High Court has also been followed by the Tribunal, Mumbai Bench, in ACIT v/s Shreepati Holdings and Finance Pvt. Ltd., ITA no.6046/Mum./ 2011, order dated 27th July 2012. 8. On the other hand, the learned Departmental Representative, strongly relied upon the findings given by the Assessing Officer. 9. After carefully considering the rival contentions and also going through the relevant findings of the learned Commissioner (Appeals) as well as the Assessing Officer and the judgment relied upon by the learned Counsel, we find that there is no dispute with regard to the fact that the assessee was liable to pay tax under the normal provisions of the Act and the taxable income was liable to be set-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter realizing the consideration. However, if that transaction is included in the total income of the assessee where the total income is assessed either under the provisions of the Act or under section l1SJB 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 arid 87 of the Act gives effect to such promise made under the statute. That is the reason why the word used is rebate. The amount paid is handed back to the assessee. In other words, payment of tax twice on the same income is avoided. Therefore, the contention that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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