ASST CIT 4(3), MUMBAI vs. MUMBAI STOCK BROKERS P. LTD, MUMBAI

सुनवाई की तायीख / Date of Hearing : 06.10.2016 घोषणा की तायीख /Date of Pronouncement : 19.10.2016 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

2. On the facts and in the circumstances of the case and in law, the impugned order of the CIT (A) is contrary to law and consequently merits to be set aside and that of the AO be restored.”

2. Briefly stated relevant facts of the case are that the assessee is a sub-broker in shares and securities and trader in shares and securities. Assessee filed the return of income declaring the total income of Rs. 2,66,56,652/-. Assessment was completed u/s 143 (3) r.w.s 147 of the Act and the assessed income was determined at Rs.2,71,12,400/-. In the assessment, AO did not allow the rebate u/s 88E of the Act. It is the opinion of the AO that the assessee company paid tax at a lower rate by complying to the normal provisions of the Act rather than payment tax @ 10% on book profits calculated as per section 115JB of the Act. Aggrieved, assessee carried the matter in appeal before the first appellate authority.

3. During the proceedings before the first appellate authority, after considering the submissions of the assessee, CIT (A) granted relief and directed the AO to allow deduction u/s 88E of the Act to the assessee while computing the taxability u/s 115JB of the Act. Aggrieved with the said decision of the CIT (A), Revenue is in appeal before the Tribunal by raising the above mentioned grounds.

4. During the proceedings before us, Ld Counsel for the assessee briefly narrated the above facts of the case and submitted that the only issue involved in this appeal relates to the allowable of rebate u/s 88E of the Act at the time of computing tax liability u/s 115JB of the Act. In this regard, Ld Counsel for the assessee mentioned that this issue is now settled by various decisions mentioned in para 2.6 of the impugned order and the judgment of the Hon’ble Karnataka High Court in the case of Horizon Capital Ltd is one of such decisions. Ld Counsel for the assessee heavily relied on the order of the CIT (A).

5. On the other hand, Ld DR for the Revenue relied on the order of the AO.

6. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. On perusal of the order of the CIT (A) in general and para 2.6 in particular, we find the same is relevant in this regard. Considering the significance of the said para 2.6 of the CIT (A)’s order for the sake of completeness this order the same is extracted as under:-

2.6. During the appellate proceedings, the appellant has filed exhaustive submission. In its exhaustive submission / argument, amongst other explanations, the appellant submitted that total income has the same meaning if the income is computed under the normal provisions of the Act or under the provisions of section 115JB of the Act. The appellant argued that the deduction u/s 88E of the Act is allowable both when the income tax is computed under the normal provisions of the Act and also when the tax liability is computed under the provisions of section 115JB of the Act. In its exhaustive submission, the appellant also relied upon the decision of Karnataka High Court in the case of Horizon Capital Ltd. On this issue, the appellant has also relied on the decision of Kolkata ITAT in the case of Ganeshyam Securities (P) Lts vs. CIT (ITA No.342 / Kol / 2012); Nakamichi Securities Ltd Kolkata vs. ITO (ITA No.1108/Kol/2011); Ahmedabad ITAT in the case of S.K. Stock Broking Pvt Ltd vs. CIT (ITA No.1074/Ahd/2011) and Mumbai ITAT in the case of Touchstone Capital Market vs. Department of Income Tax (ITA No.6031/M/2011) wherein the Mumbai ITAT followed its own decision in the case of Shreepati Holdings & Finance Pvt Ltd in ITA No.6046/M/2011