Reliable Stocks & Shares (India) Limited, CHENNAI V. ITO(OSD), CHENNAI

CO 183/CHNY/2009

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6555 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-11-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-11-2011
• Assessment Year: 1996-1997
• Appeal Filed On: 11-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SURESH
• Assessee Lawyers: ALAMELU LAKSHMINARAYANAN
• Keywords: Question of law
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, ACCOUNTANT MEMBER I.T.A. NO. 1622/MDS/2009 (ASSESSMENT YEAR : 1996-97) THE INCOME TAX OFFICER (OSD), COMPANY CIRCLE V(3), CHENNAI 600 034. (APPELLANT) V. M/S RELIABLE STOCKS & SHARES (INDIA) LIMITED, 68A, CATHEDRAL ROAD, GOPALAPURAM, CHENNAI 600 086. PAN : AABCR7647Q (RESPONDENT) C.O. NO. 183/MDS/2009 (IN I.T.A. NO. 1622/MDS/2009) ASSESSMENT YEAR : 1996-97 M/S RELIABLE STOCKS & SHARES (INDIA) LIMITED, 68A, CATHEDRAL ROAD, GOPALAPURAM, CHENNAI600 086. (CROSS-OBJECTOR) V. THE INCOME TAX OFFICER (OSD), COMPANY CIRCLE V(3), CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SMT. ALAMELU LAKSHMINARAYANAN, JCI T RESPONDENT BY : SHRI B. SURESH, CA DATE OF HEARING : 1.11.2011 DATE OF PRONOUNCEMENT : 1.11.2011 I.T.A. NO. 1622/MDS/09 C.O. NO. 183/MDS/09 2 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : APPEAL OF THE REVENUE IS DIRECTED AGAINST ORDER D ATED 26.2.2009 OF COMMISSIONER OF INCOME TAX (APPEALS)-V , CHENNAI, WHEREAS, CROSS-OBJECTION OF ASSESSEE IS IN SUPPORT THEREOF. 2. ISSUE RAISED IN THE APPEAL IS REGARDING DISALLOW ANCE OF ` 7,56,248/- MADE BY THE A.O. RELYING ON SECTION 43B OF INCOME-TAX ACT, 1961 (IN SHORT THE ACT), IN RESPECT OF FEES PAID BY THE ASSESSEE TO SEBI. THIS DISALLOWANCE WAS DELETED BY CIT(APPE ALS) ON ASSESSEES APPEAL. AS PER THE REVENUE, THE ORDER O F THIS TRIBUNAL IN THE CASE OF NAVIA MARKETS LTD. V. ACIT (I.T.A. NOS. 2126 TO 2128/MDS/2003 DATED 25.8.2004), RELIED ON BY THE CI T(APPEALS) FOR DELETING THE DISALLOWANCE, HAD NOT BECOME FINAL AND THE DEPARTMENT HAD MOVED AGAINST IT BEFORE THE JURISDICTIONAL HIGH COURT. 3. WHEN THE MATTER CAME BEFORE US, LEARNED A.R. POI NTED OUT THAT HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF NA VIA MARKETS LTD. I.T.A. NO. 1622/MDS/09 C.O. NO. 183/MDS/09 3 [T.C.(A) NO.191 TO 193 OF 2005) VIDE ITS ORDER DATE D 14.12.2010], HAD DISMISSED THE APPEAL OF THE REVENUE. 4. LEARNED D.R. FAIRLY CONCEDED THAT THE MATTER HAS BEEN DECIDED AGAINST THE REVENUE. 5. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL C ONTENTIONS. IT WAS HELD BY HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF NAVIA MARKETS LTD. (SUPRA) AT PARA 10 OF ITS ORDER AS UND ER :- 10. IN EFFECT THE HONOURABLE SUPREME COURT ITSELF H AS HELD THAT THE FEE PAYABLE UNDER THE PROVISIONS OF THE SEB I ACT, RULES AND REGULATIONS FRAMED THEREUNDER CANNOT BE CONSTRU ED AS A TAX OR FEE AND THAT THE PAYMENT OF SUCH CHARGES FOR THE PURPOSE OF REGISTRATION OF STOCK BROKER AND FOR REGULATING ITS AFFAIRS IS ONLY FOR REGULATING THE ACTIVITIES OF THE SECURITIES MAR KET AND FOR THE REGISTRATION OF THE BROKERS AND OTHER INTERMEDIARIE S IN THE SAID MARKET. THEREFORE, APPLYING THE ABOVE RATIO LAID DO WN BY THE HONOURABLE SUPREME COURT IN THE DECISION REPORTED I N (2009) 314 ITR 167 COMMISSIONER OF INCOME TAX VS. MC DOWELL AN D COMPANY LIMITED) AS WELL AS 2001 (104) COMPANY CASES (B.S.E. BROKERS FORUM AND OTHERS VS. SECURITIES AND EXCHANGE BOARD OF INDIA AND OTHERS), WE HAVE NO HESITATION TO HOLD THAT THE PAYMENT OF FEE PAID OR PAYABLE TO SEBI CANNOT BE BROUGHT WITHIN THE PROVISIONS OF SECTION 43-B OF THE ACT AND CONSEQUEN TLY THE CONCLUSION OF THE TRIBUNAL THEREFORE DOES NOT CALL FOR ANY INTERFERENCE. THE QUESTION OF LAW IS THEREFORE ANS WERED AGAINST THE APPELLANT. I.T.A. NO. 1622/MDS/09 C.O. NO. 183/MDS/09 4 THEREFORE, WE ARE OF THE OPINION THAT THE APPEAL OF THE REVENUE IS DEVOID OF ANY MERITS. THE ISSUE IS COVERED IN FAVO UR OF THE ASSESSEE BY THE ABOVE DECISION OF HON'BLE JURISDICTIONAL HIG H COURT. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. 7. THE C.O. BEING IN SUPPORT OF THE ORDER OF CIT(AP PEALS), HAS BECOME INFRUCTUOUS AND HENCE, IT IS ALSO DISMISSED. 8. TO SUMMARIZE, BOTH THE APPEAL AND C.O. ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 1 ST NOVEMBER, 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 1 ST NOVEMBER, 2011. KRI. COPY TO: (1) ASSESSEE (2) ASSESSING OFFICER (3) CIT(A)-V, CHENNAI-34 (4) CIT, CHENNAI-III, CHENNAI (5) D.R. (6) GUARD FILE