TaxTMI 
TaxTMI 
2010 (7) TMI 991
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....ssee from the income tax on the income computed under section 115JB of the Income Tax Act, 1961. 2. The brief facts of the case are that 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 STT for the Assessment Year 2005-06 of Rs. 35,05,443. The Assessing Officer thereafter issued a notice under section 148 Dt.5.2.2008 stating that certain income in respect of the assessment year 2005-06 had escaped assessment. The assessee filed its reply stating that the assessee had returned income of Rs. 1,04,81,991 and after set off of the car....
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....h the legal provisions relating to the issue. He submitted that the term 'income tax' has not been defined under the Income Tax Act but the term 'tax' has been defined under Clause 43 of Section 2 of the Income Tax Act, 1961 to mean "income tax chargeable under the provisions of the Act and also super tax chargeable under the provisions of this Act and in relation to the assessment year commencing from 1.4.2006 and any subsequent assessment year includes the fringe benefit tax payable under section 115WA of the Income Tax Act, 1961." He also drew our attention to section 87 of the Income Tax Act, 1961 wherein it is provided that in computing the amount of income tax on the total income of an assessee with which he is chargeable for any asse....
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....total income shall be the income tax @ 7 ½%. He submitted that sub section (5) of section 115JB provides that save or otherwise provided in this section, all other provisions shall apply after computing the income under section 115JB of the Income Tax Act, 1961. Thus according to him as provided under section 87 of the Income Tax Act, 1961, the assessee is entitled to rebate of the STT paid by him under section 88E of the Income Tax Act, 1961. He also drew our attention to the Form 6 i.e. the format of the income tax return provided by the Department of Income Tax wherein the rebate under section 88E is provided for after computation of the income tax under the regular provisions of the Act and also under section 115JB of the Act. Th....
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....under the regular provisions of the Income Tax Act and under the deeming provision under section 115JB of the Act. It has been provided that where the income tax payable by the assessee on the total income computed under regular provisions of the Act is less than 7 ½% of the book profit prepared in accordance with the Companies Act, the higher of the tax i.e. the book profit shall be deemed to be the total income of the assessee and tax payable by the assessee shall be the amount of income tax at the specified rate. When we look at the provisions of section 87 of the Income Tax Act, 1961, we find that the rebate is to be granted from the amount of income tax chargeable on the total income of the assessee. The income tax is computed a....