9911796707
TMI Blog2019 (6) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances of the appellant's case in upholding the action of the AO in restricting the rebate u/s 88E at Rs. 6,16,44,627/- as against Rs. 6,45,33,420/- claimed by the appellant. 2. That the learned CIT(A) has failed to appreciate that if the other income included in the 'profits and gains of business' was to be excluded, then the proportionate corresponding expenses attributable to the same were also to be excluded. 3. That the learned CIT(A) has grossly erred in law and on facts by not accepting the claim of the appellant for proportionate allocation of business expenses between income arising from the taxable securities transactions and other income (not arising from taxable securities transactions) for the purposes of computing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r provisions of section 88E of I.T. Act, rebate U/s 88E of I.T. Act is admissible in respect of income of an assessee, chargeable under the head "Profits and gains of business or profession", arising from taxable securities transaction. For ready reference, the provisions of section 88E of I.T. Act are reproduced as under: "[Rebate in respect of securities transaction tax. 88E. (1) Where the total income of an assessee in a previous year includes any income, chargeable under the head "Profits and gains of business or 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, computed in the manner provided in sub-section (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to explain why the claim U/s 88E of I.T. Act should not be restricted to the profits and gains of business arising from taxable security transaction only. In response, the assessee filed revised working of claim U/s 88E of I.T. Act during assessment proceedings. However, in the revised working submitted by the assessee, the assessee claimed that proportionate expenses should also be allocated against the incomes which have been excluded from the profits of the business for computing the rebate U/s 88E of I.T. Act. The AO, however, did not accept the request of the assessee, stating that the other income on which deduction U/s 88E was not allowable was only 3.32% of the total income; and further, that most of the incomes would not requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income. While working out this revised claim u/s 88E as per the directions of the AO, it was pointed out that whole of the income is taxable under the head 'Business Income' and has also been taxed by the AO under the head 'Business Income' yet if some part of income is to be excluded from the nature of business income to which section 88E is applicable, then corresponding expenses should also be excluded. Various submissions which were made before the Ld. AO as well as before the Ld. CIT(A) are reproduced by the Ld. CIT(A) in his order. The operating expenses for running the business were allocated in the ratio of business income from share trading and other income and it was requested that based on such computation, deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice to this since AO himself accepts that expenses against the brokerage income could have been claimed by the assessee it may please be held that proportionate expenses should be allocated to earning of brokerage income in the ratio of STT paid income and non-STT paid income by including at least brokerage income into the non-STT income. Although the AO has claimed non-STT income as other income, but finally the same has been assessed as business income, therefore it would be unfair to tax whole of the non-STT income business income on gross basis without allocating any expense to the same. Therefore, on the basis also, the allocation done by the assessee at Page 6 & 7 of CIT(A)'s order is prayed to be upheld." (C) At the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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. However, 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 of I.T. Act, is a reasonable claim. Merely, because income on which rebate U/s 88E of I.T. Act was not allowable was only 3.32% of the total income, such allocation of expenses cannot denied. Moreover, 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 Ld. CIT(A) has supported this ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
