ITO Vs Madhu Agarwal (ITAT Jaipur)
Summary: The Income Tax Appellate Tribunal, Jaipur Bench, considered the Revenue’s appeal against the order of the CIT(A), which had allowed rebate under section 87A of the Income-tax Act, 1961 on tax payable on short-term capital gains. The appeal concerned A.Y. 2024-25 and the assessee had opted for the new tax regime under section 115BAC.
The solitary issue before the Tribunal related to denial of rebate under section 87A on tax arising from short-term capital gain. The rebate had initially been denied by the CPC while processing the return under section 143(1), but the CIT(A) allowed the assessee’s claim. The assessee’s total income for the year was stated to be Rs.4,99,250/-, comprising income from business or profession, income from other sources, short-term capital gain of Rs.3,61,100/- and long-term capital gain of Rs.44,082/-. The CIT(A) order recorded a rebate claim of Rs.23,276/-.
The CIT(A) examined the first proviso to section 87A inserted by the Finance Act, 2023 with effect from 1 April 2024. The provision provides a rebate where total income chargeable under section 115BAC(1A) does not exceed Rs.7,00,000/-. The CIT(A) observed that the statutory provision did not expressly exclude tax computed on short-term capital gains chargeable under section 111A. It accordingly held that the rebate could not be denied merely because part of the income consisted of special-rate income.
