ITAT upholds rebate for STT under Section 88E for AY 2007-2008.

The ITAT upheld the CIT(A)'s decision to allow the rebate under Section 88E to the assessee for the assessment year 2007-2008. The ITAT relied on a precedent set by the Hon'ble Karnataka High Court, which ruled that the assessee can claim deduction of the Securities Transaction Tax (STT) paid while computing total income under Section 115JB. The ITAT dismissed the revenue's appeal, affirming the assessee's entitlement to the deduction of STT paid.

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Issues: Appeal against order of CIT(A) for assessment year 2007-2008 regarding allowance of rebate u/s 88E against tax worked u/s 115JB.

Analysis:
1. The department filed an appeal against the order of CIT(A) for assessment year 2007-2008, challenging the allowance of rebate u/s 88E against tax worked u/s 115JB. The main contention was whether the assessee is entitled to claim deduction u/s 88E from the tax worked u/s 115JB.

2. The learned AR argued that the issue in this appeal is covered by a decision of the Hon'ble Karnataka High Court in a similar case. The Hon'ble High Court had ruled that the assessee is entitled to claim deduction of the amount equal to the STT paid by him in respect of taxable securities transactions while computing total income under Section 115JB of the Act.

3. The Assessing Officer had disallowed the rebate under Section 88E to the assessee while computing income under Section 115JB. However, the CIT(A) directed the Assessing Officer to allow the rebate under Section 88E to the assessee. The ITAT observed that the issue was similar to the one decided by the Hon'ble Karnataka High Court in the case of M/s Horizon Capital Limited, where it was held that the assessee can claim deduction of STT paid in respect of taxable securities transactions.

4. Considering the submissions and orders of the authorities, the ITAT upheld the decision of the CIT(A) and rejected the grounds taken by the department. The ITAT concluded that the assessee is entitled to claim deduction of STT paid while computing total income under Section 115JB, as per the decision of the Hon'ble Karnataka High Court.

5. The ITAT dismissed the appeal of the revenue, citing the decision of the Hon'ble Karnataka High Court in favor of the assessee. The order was pronounced in the open court on October 10th, 2012.

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