TaxTMI 
TaxTMI 
2010 (9) TMI 641
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....ubmissions and perused the relevant material on record. It is noted that the question of making disallowance u/s 14A is no more res integra in view of the recent judgment dated 12.08.2010 of the Hon'ble Bombay High Court in Godrej& Boyce Limited Vs. ACIT holding that the provisions of section 14A are applicable in such circumstances and the disallowance has to be worked out by the AO on some reasonable basis and not rule 8D. Under such circumstances, we set aside the impugned order and restore the matter to the file of the AO for deciding the quantum of disallowance as per the aforenoted judgment, after allowing a reasonable opportunity of being heard to the assessee. 4. The second ground is against not giving benefit of rebate u/s.88E o....
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....wed because there was income from speculation business of shares before setting off of the brought forwards speculation loss. In order to appreciate the contention, it would be in fitness of things to take stock of the relevant part of section 88E, which reads as under:- "(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), of an amount equal to the securities transaction tax paid by him in respect of the taxable securities trans....
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....section 87, that the rebate is allowed under the sections provided in this Chapter including 88E, to the extent of income-tax payable. It has been contended by the ld. AR that but for the brought forward speculation loss, there was positive income from speculation in this year and hence the rebate should have been allowed by considering the positive income from speculation business of the current year. 9. At this juncture, it would be relevant to consider the provisions of section 80B(5) which defines "gross total income" to mean the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter. It, therefore, transpires that the total income of an assessee is computed by firstly dete....
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.... amount of income-tax on such income arising from such transactions" 11. From the above it can be clearly seen that rebate u/s.88E is available only against the amount of income-tax arising from the transactions which have suffered STT. It is nobody's case and rightly so that the amount of income tax on other items of incomes is also eligible for rebate u/s 88E in respect of STT paid on the transactions of securities. So in order to be eligible for relief under this section, it is imperative that there should be some liability to pay income-tax on the transactions which suffered STT and then rebate is allowable to the extent of such income-tax liability for an amount maximum of STT paid. The natural corollary is that if there is no incom....
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.....09.2010. In that case there was a sum of Rs.37.74 lakhs representing F&O profit on account of notional gains. The A.O. noted that this profit was result of market valuation on account of F&O open positions which were not squared up and therefore carried forward. He opined that the profit arising on account of open F&O was not liable to STT and hence excluded such amount for computing rebate u/s.88E. The Tribunal concurred with the view taken by the learned CIT(A) on the ground that STT was paid even on the profit of F&O open position and since such profit was also included in the taxable profit there could be no objection to the rebate being given. We find that the facts of that case lie in an altogether different compartment and bear no r....