Lisha Gajendra Marlecha Vs Income Tax Department (ITAT Mumbai)
The appeal arose from the order of the Additional/Joint Commissioner of Income-tax (Appeals), Raipur dated 27.11.2025 for Assessment Year 2024-25, affirming the Central Processing Centre (CPC), Bengaluru’s denial of rebate under Section 87A of the Income-tax Act, 1961 against tax payable on short-term capital gains (STCG) chargeable under Section 111A. The assessee, a resident individual, had filed a return declaring total income of Rs. 5,28,210, including STCG of Rs. 1,42,120 from transfer of equity shares. CPC, while processing the return under Section 143(1), denied the rebate under Section 87A.
Before the CIT(A), the assessee submitted that she was governed by Section 115BAC(1A), her total income was below Rs. 7,00,000, and while Section 112A expressly restricts rebate under Section 87A in respect of long-term capital gains, no such restriction existed under Section 111A. The CIT(A) rejected the contention, holding that rebate under Section 87A is available only against tax computed at normal slab rates and not against income taxable at special rates under Chapter XII, including STCG under Section 111A. The CIT(A) relied on the scheme of Sections 87A, 111A and 112A, the Finance Bill, 2025, the Memorandum explaining its provisions, and the Finance Minister’s Budget Speech for 2025-26 to conclude that rebate under Section 87A was not allowable against tax on STCG under Section 111A.
