TaxTMI 
TaxTMI 
2011 (10) TMI 489
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....l challenging the order passed by the Tribunal allowing the assessee's appeal and granting rebate under Section 88E for the Securities Transaction Tax paid by the assessee. 3. The assessee is a company, which is engaged in the business of purchase and sale of shares for more than a decade. It filed its return of income for the assessment year 2005-06 on 31.10.2005 declaring taxable income as nil. The assessee had also made a payment of Securities Transaction Tax (for short hereinafter referred to as STT) for the assessment year 2005-06 of Rs.35,05,443/-. The Assessing Officer issued a notice under Section 148 of the Income Tax Act, 1961 (for short hereinafter referred to as the Act) dated 05.02.2008 stating that certain income in respect....
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....e Tribunal. The Tribunal on consideration of the rival contentions held that the rebate under Section 87 of the Act is to be granted from the amount of income tax chargeable on the total income of the assessee. The income tax is computed after arriving at the total income of the assessee and Section 87 of the Act, does not differentiate between the total income computed under the regular provisions of the Act or under section 115JB of the Act. Even though sub-section (1) of section 115JB starts with the non-obstante clause, it is only for the computation of the total income and sub-section (5) of section 115JB provides for a saving clause that the rest of the provisions of the Act relating to deductions, rebate, etc the other provisions of ....
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....rate of 7.5% of book profit. In other words, if computation of income is done under the provisions of the Act and if the tax payable is less than 7.5% of the book profit and the assessee is a company, then the minimum tax payable by such a company is 7.5% of the book profit. Except to that extent, all other provisions in the Act are applicable in respect of both type of assessment. 7. Sections 87 and 88E provides for rebate. It reads as under;- "87. Rebate to be allowed in computing income tax.-(l) In computing the amount of Income tax on the total income of an assessee with which he is chargeable for any assessment year, there shall be allowed from the amount of income tax (as computed before allowing the deductions under this Chapte....
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.... For the purposes of sub-section (1), the amount of income tax on the income arising from the taxable securities transactions, referred to in that sub-section, shall be equal to the amount calculated by applying the average rate of income-tax on such income. Explanation:- For the purposes of this section, the expressions "taxable securities transaction" and "securities transaction tax" shall have the same meanings respectively assigned to them under Chapter VII of the Finance (No.2) Act, 2004." 8. As is clear from the aforesaid sections, the said provision does not give any indication as to its applicability to the computation of amount of income tax on the total income of an assessee under any particular provision of law under the Ac....
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...., but handed back to the payer after he has paid the full stipulated sum." 12. Corpus Juris Secundum defines the word rebate as "The etymological or dictionary meaning of the term includes any discount or deduction from a stipulated payment, charge, or rate not taken as in advance of payment, but handed back to the payer after he has paid the stipulated sum, even when such discount or deduction is equally applied to all from whom such payment is demandable," 13. The Kerala High Court in the case of Deputy Commissioner of Sales Tax v. Travancore Rayons Ltd. [1961] 12 STC 178 after considering the aforesaid definitions held as under:- "Rebate means relinquishing part of the liability by a person entitled to with a view to persuade....