TaxTMI 
TaxTMI 
2013 (11) TMI 896
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....ility under the MAT Provisions and in making the comparison between the tax determined under Normal Provisions of the I. T. Act and provisions u/s. 115JB for the purpose of determining applicability of the Provisions of Section 115JB on gross before allowing Rebate u/s. 88E of the Income Tax Act, 1961 from the Income Tax determined under Normal Provisions of the Act and Rebate u/s. 88E would also be available to the assessee against the tax payable u/s. 115JB of the Act. 3. On the facts and in the circumstances of the case, the impugned order of the Ld. CIT(A) is contrary to law to be set aside and that of the Assessing Officer be restored. 4. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. GROUNDS OF APPEAL FILED BY THE ASSESSEE READS AS UNDER: 1. The Ld. Commissioner of Income Tax (Appeals) erred in confirming the action of Ld. Assessing Officer in applying the provisions of Rule 8D without providing any reasons for dissatisfaction over expenses estimated by your appellant. 2. Your appellant craves leave to add, alter withdraw, delete and amend any of the grounds which may be necessary. 2. Assessee company,deal....
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....es which also included such transaction, that yielded exempt dividend, that expenses including interest and administrative expenses debited to P&L A/c included expenditure incurred for undertaking share transactions yielding exempt income that assessee's contention that no expenditure had been incurred was not acceptable, that whether no interest should be considered for the purpose of disallowance u/s. 14A Rule 8D in the light of decision delivered by the Mumbai ITAT in the case of Morgan Stanley India Securities Ltd. ,(ITA Nos. 5072/Mum/2005and6774/Mum/ 2008). After making calculations of disallowance in pursuance of the order of the Morgan Stanley India Securities Ltd. , (supra),he held that AO should verify the interest figure and calculate disallowance under Rule 8D(ii). He further upheld the disallowance of Rs. 19. 24 Lakhs under Rule 8D(iii). 4. Before us, AO has challenged deleting of dis-allowance of Rs. 20. 77 Lakhs, where as assessee has challenged the order of the FAA for confirming the action of the AO in applying the provisions of Rule 8D(iii) of the Rules. As the issues are inter-linked, we would like to decide the same by a common order. 5. Before us,Authorise....
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.... heard the rival submissions and perused the material before us. The assessee is dealing in shares and securities and had earned tax free income of Rs. 39. 71 Lakhs. As per AR, during the assessment proceedings, it had offered to the AO that disallowance of Rs. 25,000/- could be made under the head 'Expenditure incurred for earning Exempt Income'. We find that neither in the assessment order nor in Form No. 35/order of the FAA,said fact is mentioned. Fact remains that assessee had considered that some expenditure was incurred for earning tax free income during the year under consideration. While calculating the disallowance, AO has applied one formula where as FAA bifurcated the disallowance under two sub heads i. e. , Rule 8D (ii) and 8D(iii). It is also a fact that in the year under consideration, assessee's own funds have increased and amount of investment has gone down. In these circumstances ,whether any part of interest could be considered for the purpose of disallowance is a question to be decided. We are aware that the Hon'ble Jurisdictional High Court in the case of Reliance Utilities and Power Ltd. , (supra) has laid down the proposition that if there were sufficient i....
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.... P. and P. F. etc. , that payment of STT qualify for tax by way of rebate of similar footing as for payment of L. I. P. etc. , and not at par with TDS or advance tax which were treated as payment of tax u/s. 199 and 219 of the Act, that the provisions of Section 88E applied only to those cases where the total income of the assessee included income chargeable under the head 'Profits and Gains of Business/Profession arising from Taxable Securities Transaction', that provisions of Section 115JB were applicable to an assessee, being a company irrespective of the head of the income chargeable. 7. 2. Assessee preferred an appeal before the FAA. After considering the submissions, he held that from ITR 6 (where taxable worked out under normal provisions of the Act or under the MAT) entries of far ITR 6 had to be considered while calculating, income u/s. 115JB of the Act, that there was no prohibition in claiming rebate in respect of STT paid against Income Tax payable under MAT under the provisions of Section 115JB. He finally held that comparison between tax determined under normal provisions of the Act and that determined u/s. 115JB should be made for the purpose of determining the ap....
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....h computation of the amount of the income tax payable on the total income of the assessee under the Act, if such an assessee has paid tax under the aforesaid provisions mentioned in the said section to the extent of the tax paid under that section is deductible as rebate. Under section 88E, 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. Therefore, it is clear that the assessee is liable to pay securities transaction tax when he enters into securities transaction. The tax is payable simultaneously after realizing the consideration. However, if that transaction is included in the total income of the assessee where the total income is assessed either under the provisions of the Act or under section 115JB when tax chargeble on such income is arrived at, he is given the benefit of tax deductions of the amount, which he has paid under section 88E by virtue of section 87. When under section 82A, the assessee is made liable ....