2016 (7) TMI 685

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.... under section 14A made in respect of expenditure incurred for earning exempt income amounting to Rs. 28,97,483. 3. From the record, we found that the Assessing Officer has correctly computed the disallowance as per rule 8D, in so far as the relevant assessment year under consideration is the assessment year 2008-09. Accordingly, we direct the Assessing Officer to reduce the disallowance by the amount of Rs. 14,03,562 being disallowance of expenses already offered by the assessee in the return of income. We direct accordingly. 4. Ground No. 2 of the appeal is regarding reducing rebate under section88E to Rs. 1,15,39,743 from Rs. 1,95,40,847 was pressed by the learned authorised representative. 5. Rival contentions have been heard a....

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....n has the following ingredients (a) the total income of the assessee includes the income chargeable under the head 'Profits and gains of business' ; (b) such income is arising from taxable securities transactions ; (c) deduc tion under the section is allowable from the amount of Income-tax on such income arising from such transaction. Thus, the total income used in this section cannot be given a general meaning and has to be ascribed the meaning as contemplated in the context in which section 88E has been inserted by the Finance Act, 2004, with effect from April 1, 2005. The object of section 88E clearly is to protect the assessee from double taxation. Firstly, by way of payment of securities trans action tax and, secondly, by way o....

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....me and then allowing the rebate from Income-tax. This is definitely not the intention of the Legislature." 7. We have considered the rival contentions and found that during the year the assessee-company has paid the securities transaction tax (STT) of Rs. 4,38,91,830 in respect of purchase and sale of securities on recognised stock exchanges (hereinafter referred to as "taxable securities transaction (TST)") in the course of its share trading business. In the computation of taxable income, this sum of Rs. 4,38,91,830 paid as securities transaction tax has been added back while computing income under the head "Profits and gains from business or profession". Thus, the securities transaction tax paid on the taxable securities transactions i....