DCIT 4(1)(1), MUMBAI vs. D GAS SHARE AND STOCK BROKERS P.LTD, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI RAJENDRA, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं/ I.T.A. No.153/Mum/2016 (निर्धारण वर्ा / Assessment Year: 2008-09) DCIT 4(1)(1) बिधम/ M/s. G Das Share and Stock Room No. 640, 6th Floor, Brokers Pvt. Ltd. Vs. Off No. 6, 2nd Floor. 20 Aayakar Bhavan, M.K. Road, Mumbai – 400020 Rajabahadur Mansin, Ambalal Doshi Marg, Fort Mumbai. 400023 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AABCG1362K (अपीलाथी /Appellant) (प्रत्यथी / Respondent) .. Revenue by: Shri V. Vidhyadhar (DR) Assessee by: Shri S.M. Bandi (AR) सुनवाई की तारीख / Date of Hearing: 11.12.2017 घोषणा की तारीख /Date of Pronouncement: 20. 12.2017 आदेश / O R D E R PER AMARJIT SINGH, JM: The revenue has filed the present appeal against the order dated 29.10.2015 passed by the Commissioner of Income Tax (Appeals) - 9, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2008- 09. 2. The revenue has raised the following grounds:- “1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that rebate available to an assessee u/s 88E of the Act was liable to be adjusted while computing tax liability u/s 115JB of the Act by relying on the decision of ITA. No. 153/M/2016 A.Y. 2008-09

Hon’ble Karnataka High Court, which is not the jurisdictional one, in the case of M/s Horizon Capital Ltd. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that STT paid is not analogous to taxes such as TDS or advance tax or self assessment tax paid under the IT Act, and thus, if tax payable after allowing rebate u/s 88E is less than 10% of its book profit, provision of section 115JB are applicable. 3. The appellant craves leave to amend or alter any ground or add new ground which may be necessary.” 3. The brief facts of the case are that the assessee filed its return of income for the A.Y. 2008-09 on 28.08.2008 declaring total income to the tune of Rs.5,69,17,715/-. The case was selected for scrutiny and assessment u/s 143(3) of the I.T. Act, 1961 was completed on 26.04.2010 determining the total income to the tune of Rs.5,74,77,530/-. The assessee company is a member of Stock Exchange and engaged in the business of stock broking, share trading and investor in shares. During the year under consideration, it was observed that the assessee company was dealing in trading of shares and allowed rebate u/s 88E of the Act of Rs.1,54,26,582/-. After allowance of rebate u/s 88E of the I.T. Act, the net tax payable was determined @ Rs.9,10,959/- under the normal provision of income tax. However, the tax liability of the assessee u/s 115JB of the I.T. Act worked out to the tune of Rs.57,08,045/- (10% of (57548735 + 528892 – 997172) in view of the provision u/s 115JB of the Act. The assessee was not under obligation to pay the income tax at least to the extent of 10% of its book profit. Since the assessee failed to comply the said provision, therefore, an amount of Rs.57,08,045/- was assessed to the income of the assessee in view of the provision u/s ITA. No. 153/M/2016 A.Y. 2008-09

115JB of the Act and tax liability was determined to the tune of Rs.64,67,214/- u/s 115JB of the Act. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who allowed the claim of the assessee, therefore, the revenue has filed the present appeal before us.

ISSUE NO.1 & 2:- 4. Issue No. 1 & 2 are inter-connected therefore, are being taken up together for adjudication. Under these issues the revenue has challenged the allowance of claim u/s 88E of the Act in computing the tax liability u/s 115JB of the I.T. Act, 1961. Before going further it is necessary to advert the finding of the CIT(A) on record.:-

“I have considered the facts of the case as well as stand of AO and submission of the appellant. In the case under Consideration the only dispute is as to whether the rebate u/s 88E of the Act is allowable while computing the income and tax payable u/s 115JB of the Act. The Hon’ble Karnataka High Court and various benches of Hon’ble ITAT, as mentioned above, are in favour of appellant. In earlier assessment year, the decision of my predecessor and of Hon’ble ITAT ‘G’ Bench decisions are in favour of Appellant. Therefore, following the decision of my predecessor in his own case vide order ITA No. 5773/M/2013 (A.Y. 2007-08) where it is held that rebate u/s 88E of the Act is allowable to the appellant while computing its judgment in para 4 also brought on record that, no any contrary decision was brought to their notice in their hearing concluded and pronounce on 15/04/2015 and written order dated 08/07/2015 and written order 08/07/2015 provided to appellant and CIT(IV), Mumbai and to DCIT-4(1)(1), Mumbai. Therefore, now, following the above decision, the AO is directed to allow deduction u/s 88E of the Act to the appellant while computing the tax liability u/s 115JB of the Act.” On appraisal of the above said finding, we noticed that the 5. CIT(A) has decided the matter of controversy in favour of the ITA. No. 153/M/2016 A.Y. 2008-09

assessee in view of the decision passed by the Hon’ble ITAT Mumbai Bench in the assessee’s own case for the A.Y. 2007-08. The facts are not distinguishable at this stage. No new material has been brought by revenue on record to which it can be assumed that the CIT(A) has arrived at wrong decision. No new law has been brought into the notice. Taking into account all the facts and circumstances of the case, we are of the view that the CIT(A) has passed the order judiciously and correctly which is not liable to be interfere with at this appellate stage. Therefore, these issues are decided in favour of the assessee against the revenue. 6. In the result, the appeal filed by the revenue is hereby ordered to be Dismissed. Order pronounced in the open court on 20.12.2017. (RAJENDRA) (AMARJIT SINGH) लेखध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated : 20.12. .2017 vijay

ITA. No. 153/M/2016 A.Y. 2008-09

आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुंबई / DR, ITAT, Mumbai 5. 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //// उि/सहधिक िंजीकधर /(Dy./Asstt.