Assessing Officer has computed the taxable income of the assessee company under the normal provisions of the Act as well as under the special provisions of section 115JB of the Act. While computing the book profit u/s 115 JB, the Assessing Officer has not allowed the rebate on account of STT u/s 88E of the Act from the book profit of the assessee company. In a decision in the case of M/s Horizon Capital Limited, the ITAT Bangalore (2011) 64 DTR (Kar) 306 has laid down that tax rebate in respect of STT u/s 88E is available even against tax liability u/s 115JB.
It is further seen that a co-ordinate bench of the Tribunal has followed the aforesaid decision in the case of MBL Securities Pvt. Ltd. and has allowed the rebate u/s 88E from the book profit of the assessee, while computing the book profit. It is also seen that the decision of ITAT Bangalore has further been confirmed by the Hon ’ble High Court of Karnataka in its order dated 24.10.2011 in CIT Vs., M/s. Horizon Capital ltd. ITA 434 of 2010 wherein the Hon ’ble Karnataka High Court held that:
“17. Therefore, the contention that this benefit is not available to the assessee whose total income is assessed u/s 115JB has no substance. In other words, when the total income is assessed and the tax chargeable is computed, it is from that tax which is chargeable, is computed, it is from that which is chargeable, the tax paid u/s 88E is given deduction, by way of rebate, u/s 87 of the Act. This is the legislative intent. That is promise to give deduction of the tax already paid. This is the mode in which tax already paid is handed back at the time of final computation. Therefore, the judgment referred by the Tribunal is strictly in accordance with law and does not suffer from any legal infirmity, which called for interference. We do not see any substantial question of law involved in this appeal, which merits admission. The appeal is dismissed.”
From careful perusal of the above order of the Tribunal, we note that the relief has been granted to the assessee for following decision of MBL Securities Pvt. Ltd. (supra) and has allowed the rebate u/s 88E of the Act from the book profit.
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