Sarikaben Gopalbhai Polekar Vs ITO (ITAT Surat)
The assessee filed her return of income for AY 2024-25 on 15.07.2024 under the new tax regime under section 115BAC of the Income Tax Act, declaring total income of Rs.4,30,020. The income included Long Term Capital Gains (LTCG) arising from the sale of immovable property, which was taxable under section 112 of the Act. Since her total income was below Rs.7,00,000, she claimed a rebate of Rs.25,000 under section 87A against the tax payable on the LTCG.
However, while processing the return under section 143(1) through an intimation dated 15.04.2025, the CPC accepted the returned income but denied the rebate claimed under section 87A. The assessee challenged the denial, contending that section 87A did not prohibit granting rebate against tax payable on LTCG taxable under section 112. It was argued that wherever the legislature intended to restrict such rebate, it had expressly done so, and no such restriction existed in the relevant provisions applicable to the assessee. The assessee also contested the levy of interest under sections 234B and 234C.
The Department relied upon the orders of the lower authorities and argued that rebate under section 87A was not available where LTCG exceeded Rs.1,00,000, referring to section 112A(6). According to the Department, since the assessee had declared LTCG exceeding Rs.1,00,000, the denial of rebate was justified.
