Tribunal upholds CIT(A) order on book profit additions, denies STT adjustment

The Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s order on both issues. The additions to the book profit, including disallowance of Security Transaction Tax (STT) and donation, were held to be outside the scope of section 115JB. The Tribunal upheld the CIT(A)'s decision, noting that the issues were covered by previous decisions of the ITAT Bangalore bench in similar cases. Additionally, the Tribunal found that the Security Transaction Tax paid could not be adjusted against the demand as contended by the appellant.

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Issues involved: Determination of book profit u/s. 115JB of the Income Tax Act and adjustment of Security Transaction Tax credit against demand.

Issue 1 - Determination of book profit u/s. 115JB:
The appeal by the revenue challenges the CIT(A)'s order regarding the determination of book profit u/s. 115JB of the Act for the assessment year 2007-08. The AO had made additions to the book profit, including disallowance of Security Transaction Tax (STT) and donation. The CIT(A) held that these additions were not in accordance with the provisions of the Act as they were not covered by the specified items in the explanation to section 115JB. The CIT(A) deleted the additions of STT and donation, citing that they were outside the scope of section 115JB. The Tribunal confirmed the CIT(A)'s decision, noting that the issue was also covered by a previous decision of the ITAT Bangalore bench in a similar case.

Issue 2 - Adjustment of Security Transaction Tax credit against demand:
The second ground of appeal was against the demand raised for the year, with the appellant contending that the Security Transaction Tax paid should be adjusted against the demand u/r 88E. The appellant referred to a decision of the ITAT Bangalore bench in a similar case. The Tribunal found that the items disallowed by the AO were not covered under the specified items for additions to the book profit u/s. 115JB. Additionally, the Tribunal noted that the issue was already addressed in a previous decision of the ITAT Bangalore bench. Consequently, the Tribunal upheld the CIT(A)'s decision on this issue.

In conclusion, the Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s order on both issues.

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