2018 (8) TMI 1719

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....2015 under section 154 of the Income Tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in restricting the rebate claim under section 88E of the Act at Rs. 22,70,512/- as against claimed by assessee and allowed by AO under section 143(3) of the Act at Rs. 30,93,497/-. The assessee has raised the issue that this is highly debatable issue and hence, the rectification order passed by the AO is without jurisdiction. For this assessee has raised the following two grounds: - "1. In the facts and circumstances of the case and in law, the Learned CIT(A) erred in upholding the rectification order passed by Assessing Officer u/s 154, disregardi....

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....ed for As per section 88E of the Income Tax Act 1961, where the total income of an assessee in a previous year includes any income chargeable under the had "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 of such income arising from such transaction of an amount equal to the securities transaction tax paid by him in respect of table securities transaction entered into in course of his business. Further, as per sec. 2(10) of IT Act average rate of income tax means rate arrived at by dividing the amount of income tax calculated on the total income, by such total income. Your company is broker in NSE and is also engaged in tr....

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.... by observing that "Therefore, the correct allowable rebate works out to Rs. 22,70,52/- [ Rs. 93,51,369 x 24.28%], rater than Rs. 30,98,497/- allowed in the order under section 143(3)." This rectification order under section 154 was passed by the AO on 18.03.2015. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) confirmed the action of the Assessing Officer. Aggrieved, now assessee is in appeal before Tribunal. 5. We have heard the rival contentions and gone through the facts and circumstances of the case. We find that the plea of the assessee is that this computation of rebate under section 88E of the Act amounting to Rs. 30,98,497/- was allowed by the AO while framing assessment under section 143(3) of the Act. The AO....

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.... be applied on the income which is computed under the head profits and gains of business or profession. Such income has to be referred only in the context of meaning given in sub-section (1). If the business income of the assessee company is taxed at maximum marginal rate, then rebate is to be allowed for the security transaction tax paid on such income only under section 88E. The short term capital gain is taxed at lower rate under section 111A, but at the same time, no security transaction tax credit is allowed against the same. The tax rate of business income is governed by altogether different provisions of the Act which could not be imported or read into section 88E. The phrase "amount calculated by applying the average rate of income ....