Gurminder Singh Vs ITO (ITAT Chandigarh)
The assessee appealed against the order of the Commissioner of Income Tax (Appeals), dated 27.05.2025, arising from an intimation under Section 143(1) issued by the CPC on 23.03.2025 for Assessment Year 2024-25. The sole issue in dispute was the quantum of rebate available under Section 87A.
During the relevant year, the assessee earned Equity Long-Term Capital Gains of ₹1,03,264, Debt Long-Term Capital Gains with indexation of ₹1,19,020, Equity Short-Term Capital Gains of ₹2,247, Debt Short-Term Capital Gains of ₹7,607, and Income from Other Sources of ₹3,13,177, aggregating to ₹5,45,315. Agricultural income of ₹8,47,263 was also disclosed for rate purposes.
The assessee computed tax at ₹27,586, claimed a rebate of ₹25,000 under Section 87A, and declared tax payable of ₹2,586. The CPC, however, restricted the rebate to ₹3,119, increasing the tax payable to ₹24,467 and raising a total demand of ₹25,710.
The CIT(A) upheld the CPC’s action, holding that under Section 112A(6), rebate under Section 87A is available only on the income tax on total income as reduced by the tax payable on capital gains referred to in Section 112A(1). Accordingly, the CIT(A) held that the rebate could not be allowed against tax computed on long-term capital gains.
