TMI Blog2018 (8) TMI 1719X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be allowed deduction of an amount equal to the securities transaction tax paid by him in respect of transactions chargeable to securities transactions tax entered into in the course of business during that previous year. From the amount of income tax on such income arising from such transaction. An assessee is eligible for deduction from the amount of income tax on such income arising from such transactions computed in the manner provided in section 88E of the Act i.e. an equal amount to the securities transaction paid by him in respect of taxable securities transaction entered into in the course of business during the previous year. It means that the issue has two plausible views and once, it is doubtful issue, the AO cannot res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by Assessing Officer u/s 154, disregarding the legal position that when the issue is debatable or two views are possible or the issue involves a long drawn process of reasoning, it cannot be subject matter of rectification under section 154. 2. Without prejudice to the above, in the facts and in circumstances of the case and in law, the Learned CIT(A) has erred in confirming the action of Assessing Officer in restricting the rebate u/s 88E at ₹ 22,70,512/- as against ₹ 30,93,497/- claimed by the appellant and allowed in assessment. 3. Briefly stated facts are that the assessee company is engaged in the business of share trading and also investment and assessment was completed by the AO in the case of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Your company is broker in NSE and is also engaged in trading of securities. The assessment for AY 2008-09 was completed after scrutiny, assessing total taxable income at ₹ 7.75 lakhs, wherein the department had allowed rebated under section 88E of ₹ 30,93,497/- as claimed. It is observed from the record that your income during the financial year 2007-08 consisted of following: Income from share treading 93,51,369 Interest income 2,44,256 Interest income 26,68,539 Short term capital gain 49,2,136 Total assessed income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO on 18.03.2015. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) confirmed the action of the Assessing Officer. Aggrieved, now assessee is in appeal before Tribunal. 5. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the plea of the assessee is that this computation of rebate under section 88E of the Act amounting to ₹ 30,98,497/- was allowed by the AO while framing assessment under section 143(3) of the Act. The AO has to go through the definition of total income as given in the provisions of section 111A of the Act, since during the year under consideration, the assessee has also earned income by way of short term capital gains on which the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxed at maximum marginal rate, then rebate is to be allowed for the security transaction tax paid on such income only under section 88E. The short term capital gain is taxed at lower rate under section 111A, but at the same time, no security transaction tax credit is allowed against the same. The tax rate of business income is governed by altogether different provisions of the Act which could not be imported or read into section 88E. The phrase amount calculated by applying the average rate of income tax as used in sub section (2) has to be reckoned as average rate of income tax on business income only. Thus, we do not find any merit in the ground raised by the Department as the directions given by the learned Commissioner (Appeals) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the above provisions, we are of the view that an assessee is eligible for deduction from the amount of income tax on such income arising from such transactions computed in the manner provided in section 88E of the Act i.e. an equal amount to the securities transaction paid by him in respect of taxable securities transaction entered into in the course of business during the previous year. It means that the issue has two plausible views and once, it is doubtful issue, the AO cannot resort to section 154 of the Act i.e. rectification of mistake apparent from record. Accordingly, we reverse the orders of the lower authorities and allow the appeal of the assessee. 9. In the result, the appeal of the assessee is allowed. Order pronounce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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