TaxTMI 
TaxTMI 
TaxTMI 
2015 (2) TMI 534
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....the decisions relied upon. 3. The facts in brief are that during the course of assessment proceedings the AO noticed that assessee company had included Security Transactions Tax (STT) of Rs. 49,90,683/- in the value of credit shares during the year. Sale and purchase value of shares were shown under valued and over valued by the same amount of Rs. 49,90,683/- on account of STT. The AO was of the view that as per section 40(a)(ib) of the Income Tax Act, 1961 the STT is not an allowable expenses under the head "Income from Business and Profession." The AO accordingly made addition of Rs. 49,90,683/- to the income of the assessee. The AO made further addition of Rs. 54,000/- u/s 94(7), SIT disallowance of Rs. 85,179/- aggregating to Rs. 1,39,....
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....nt of STT was furnished. He pointed out further that there was no revenue implications as it is evident from ITNS-150 in which after making the correct assessment , there was no tax payable due to availability of reduction/rebate of tax u/s 88E thus it was a case where instead of deduction of STT from the income, reduction of STT from the tax was to be allowed. 5. Ld. AR submitted that assessee is in the purchase and sale of shares as its business and had made an aggregate amount of Rs. 318.61 crores as purchase and Rs. 319.22 crores as sales of shares. STT which is paid at the time of purchases remained part of purchase price and was actually claimed in profit and loss account purchases. There was no malafide or in other words it was a ca....
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.... loss account showing the amount of book profit in the purchase of shares which was exclusive of STT, computation of income and return shown that tax after MAT credit was nil and that rebate u/s 88 E remained unutilized ; revised computation of income showing that after MAT receipt u/s 88E, there was nil tax liability ; details of purchase and sale of shares furnished during assessment proceedings, submissions made during the penalty proceedings that STT was inadvertently claimed and there was no gain to the assessee and STT could not utilized as rebate and submissions made before the Ld. CIT(A) explaining the error because of amendment in section 40 of the Act. 8. Regarding the penalty levied on the addition of Rs. 54,000/- made u/s 94(7)....
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....which it was not entitled to resulting in making of disallowance / addition by the AO. He submitted further that the assesee has also lost in quantum. 11. Considering the above submissions we find that there is no reason to doubt the bonafide of the assessee in making the claim as there was no gain to the assesee as STT could not be utilized as rebate and secondly there was no tax sought to be evaded. In both the situation i.e tax payable on return income and tax position in the assessed income, the tax liability was Nil. So far as other addition / disallowance made on account of section 94(7) and u/s 14A of the Act are concerned there is no reason to doubt the above explanation of the assessee. Besides, the additions/disallowances on whic....