1. Assessee opted for tax regime under Section 115BAC and claimed Section 87A rebate against tax on short-term capital gains under Section 111A, which the Revenue disallowed in rectification. (Para 1 , 3 )
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2026 Supreme(Online)(ITAT) 32729
IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, JAIPUR
Kuldip Singh, J, Prakash, Accountant Member
Anita Sharma – Appellant
Versus
Bata Showroom – Respondent
ITA No: 1344/JPR/2026
Important Points
Rebate under Section 87A of the Income Tax Act, 1961, is allowable on tax computed on short-term capital gains under Section 111A, even when the assessee has opted for the tax regime under Section 115BAC for the Assessment Year 2024-25.
Subject
Tax - Income Tax
Act Referred
Headnote
(A) Income Tax - Rebate under Section 87A - Short Term Capital Gain - Allowability of rebate on tax computed on short term capital gain under Section 111A for assessees opting for the tax regime under Section 115BAC for Assessment Year 2024-25 is permissible. (Para 9)
Issues: Whether a rebate under section 87A of the Act is allowable on the tax computed on short term capital gain offered to tax under section 111A of the Act, where the assessee has opted for the tax regime under section 115BAC of the Act for the Assessment Year 2024-25.
Issues: Whether a rebate under section 87A of the Act is allowable on the tax computed on short term capital gain offered to tax under section 111A of the Act, where the assessee has opted for the tax regime under section 115BAC of the Act for the Assessment Year 2024-25.
Legal Category Hierarchy
Advocates:
For the Appellants/Petitioners: Aarti Rawat
For the Respondents: Ajay Khandelwal
For the Appellants/Petitioners: Aarti Rawat
For the Respondents: Ajay Khandelwal
Table of Contents
2. Revenue contended Section 87A rebate is unavailable for taxes on special rates like Section 111A gains; assessee relied on established Tribunal precedents allowing such claims. (Para 2 , 6 , 7 )
3. The Tribunal observed the matter is settled by coordinate Bench decisions and the Revenue failed to provide contrary jurisdictional high court or Supreme Court rulings. (Para 6 , 7 , 8 )
4. Rebate under Section 87A is permissible against tax computed on short-term capital gains under Section 111A for assessees opting for the concessional tax regime under Section 115BAC. (Para 8 , 9 )
5. The Tribunal upheld the lower appellate order granting the rebate and dismissed the Revenue's appeal. (Para 9 , 10 )
6. Is rebate under Section 87A of the Income Tax Act available against tax on short-term capital gains under Section 111A for assessees under Section 115BAC?
Yes. The Tribunal held that such rebate is allowable in accordance with law, noting the issue is covered by its own decisions and established precedents of coordinate Benches. (Para 5 , 8 , 9 )
ORDER
PER : PRAKASH, ACCOUNTANT MEMBER:-
1. This appeal by the Revenue is directed against the order of the learned Additional/Joint Commissioner of Income Tax (Appeals)-1, Coimbatore, [hereinafter referred to as “Addl./JCIT(A)”] dated 16.03.2026 for the Assessment Year 2024-25 arising out of the rectification order dated 07.01.2026 [for the intimation dated 11.03.2025] passed by the Assessing Officer at the Centralized Processing Centre (hereinafter referred to as “the AO at the CPC”) under section 154 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”),
2. The grounds of appeal raised by the Revenue before us in the memorandum of appeal in Form No. 36 read as under:
1. Whether on the facts and circumstances of the case and in law, the Ld. Addl CIT(A)-1, Coimbatore is justified in allowing the rebate u/s 87A of the Act, on STCG, when rebate u/s 87A of the Act, 1961 is not available in respect of Income Tax payable on income chargeable to tax on special rates, which includes Short Term Capital Gain u/s 111A of the Act?
2. Whether on the facts and circumstances of the case and in law, the order of the Ld. Addl CIT(A)-1, Coimbatore is justified in view of the CBDT Circular No. 13/2025, dated 19.09.2025 which has made it expressly clear that it was never the statutory intent to allow rebate in cases where income is chargeable to tax u/s 115BAC(1) of the Act, 1961 and any such cases where rebate is erroneously claimed are to be rectified, thereby having no doubt that such claim was statutorily never permissible?
3. The appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.
3. Briefly stated, the facts of the case are that the assessee filed the return of income for the year under consideration opting for the tax regime provided under section 115BAC of the Act. In the said return, the assessee claimed a rebate under section 87A of the Act amounting to Rs. 15,703 against the tax computed on short term capital gain chargeable to tax under section 111A of the Act. The AO at the CPC, by the intimation order dated 11.03.2025 passed under section 143(1) of the Act, disallowed the said rebate. Assessee’s request for rectification under section 154 of the Act was also rejected. Aggrieved, the assessee filed an appeal before the learned Addl./JCIT(A), who allowed the appeal and directed the AO to grant the rebate under section 87A of the Act.
4. Aggrieved by the said order of the learned Addl./JCIT(A), the Revenue is in appeal before us.
5. The only issue that arises for our consideration is whether a rebate under section 87A of the Act is allowable on the tax computed on short term capital gain offered to tax under section 111A of the Act, where the assessee has opted for the tax regime under section 115BAC of the Act for the Assessment Year 2024-25.
6. The learned Authorised Representative (hereinafter referred to as the “AR”)for the assessee relied on the decision of the Hon’ble Ahmedabad Bench of the Tribunal in the case of Jayshreeben Jayantibhai Palsana vs. ITO (ITA No. 1014/Ahd/2025), wherein an identical issue has been decided in favour of the assessee by allowing the rebate under section 87A of the Act for the Assessment Year 2024-25.
7. The learned Departmental Representative (hereinafter referred to as the “DR”)was unable to bring to our notice any contrary decision of the Hon’ble jurisdictional High Court or of the Hon’ble Supreme Court. The learned DR was also unable to distinguish the decision relied upon by the learned AR.
8. We further note that this Bench, in ITA No. 1412/JPR/2025 dated 25.06.2026 for the Assessment Year 2024-25, has considered identical facts and has held that a rebate under section 87A of the Act is allowable in such a situation.
9. The issue is thus covered in favour of the assessee by the decision of the coordinate Bench as well as by the decision of the Hon’ble Ahmedabad Bench
