Mahalakshmi Shares P Ltd., CHENNAI V. ACIT, CHENNAI

CO 47/CHNY/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8898 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-08-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 22-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R T VIJAYA RAGHAVAN
• Assessee Lawyers: T N BETGIRI

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI. BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO. 315/MDS/2013 ASSESSMENT YEAR 2009-10 & C.O. NO. 47/MDS/2013 [IN ITA NO.315/MDS/2013] THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(4), AAYAKAR BHAVAN, NEW BLOCK, 7 TH FLOOR, 121, M.G. ROAD, CHENNAI 600 034. VS. M/S. SRI MAHALAKSHMI SHARES P. LTD., 85, ARMENIAN STREET, CHENNAI 600 001. [PAN : AAACS9439G] (APPELLANT) (RESPONDENT/CROSS OBJECTOR) APPELLANT BY : SHRI T.N. BETGIRI, JCIT RESPONDENT BY : SHRI R.T. VIJAYA RAGHAVAN, C.A. DATE OF HEARING : 08.08.2013 DATE OF PRONOUNCEMENT : 22.08.2013 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) V, CHENNAI DAT ED 14.12.2012 RELEVANT TO THE ASSESSMENT 2009-10. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL OF THE R EVENUE RELATES TO WHETHER THE PROVISIONS OF SECTION 194H IS APPLICABL E TO ASSESSEES CASE OR NOT. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.3 33 31 11 15 55 5/M/ /M/ /M/ /M/13 1313 13 & && & C.O. NO. 47/M/13 C.O. NO. 47/M/13 C.O. NO. 47/M/13 C.O. NO. 47/M/13 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A SHARE BROKING COMPANY. THE ASSESSEE HAS RECEIVED ` .1,52,80,541/- AS BROKERAGE INCOME AND HAS ALSO PAID ` .85,39,334/- AS COMMISSION. THE ASSESSING OFFICER I N THE ASSESSMENT ORDER HAS DISALLOWED COMMISSION PAYMENT ON THE GROUND THAT NO TDS WAS DEDUCTED UNDER SECTION 194H OF THE ACT. 4. ON APPEAL BY THE ASSESSEE, THE LD. CIT(APPEALS) BY ALLOWING THE APPEAL OF THE ASSESSEE HAS OBSERVED AS UNDER: 5.2 I HAVE GONE THROUGH THE APPELLATE ORDER IN AP PELLANT'S OWN CASE FOR THE IMMEDIATE PRECEDING YEAR 2008-09 IN ITA NO. 344/2010-11 DATED 30.9.2011 WHEREIN I HAD ALLOWED THE APPEAL OF THE APPELLANT ON THIS ISSUE AND MY OBSERVATIONS FOR THAT ORDER IS RE PRODUCED AS UNDER: ' ... IT IS SEEN THAT THE AO HAS ERRED IN APPLYING THE PROVISIONS OF SECTION 194H OF THE ACT TO THE CASE OF THE APPELLAN T BEING SHARE AS EXPLANATION (I) TO SECTION 194H SPECIFICALLY EXC LUDES PAYMENTS FOR ANY SERVICES WITH RESPECT TO BUYING OR SELLING OF SECURITIES FROM THE APPLICATION OF THE PROVISIONS O F SECTION 194H. FURTHER EXPLANATION (IA) TO SECTION 194H EXPLAINS T HAT THE EXPRESSION 'SECURITIES' SHALL HAVE THE MEANING ASSI GNED TO IT IN CLAUSE (H) OF SECTION 2 OF THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 (42 OF 1956). AS PER THE PROVISIONS OF CL AUSE H OF SECTION 2 OF THE SAID ACT, SECURITIES INCLUDE SHARE S, SCRIPS, STOCKS, BONDS .... IN VIEW OF THE FACTS THAT THE APPELLANT IS A SHARE BROKER WHO HAS MADE PAYMENT TO SUB BROKERS WHO INTRODUCED CLIENTS TO THE APPELLANT COMPANY AND ARE ALSO RESPONSIBLE FOR COLLECTING DUE FROM THE CLIENTS AND FOR TAKING CARE OF THE DEL IVERY, I HOLD THAT THE PROVISIONS OF SECTION 194H ARE NOT APPLICA BLE TO THE APPELLANT'S CASE AND THE AD IS DIRECTED TO DELETE ' THE DISALLOWANCE OF ..... 5. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BE FORE THE TRIBUNAL. I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.3 33 31 11 15 55 5/M/ /M/ /M/ /M/13 1313 13 & && & C.O. NO. 47/M/13 C.O. NO. 47/M/13 C.O. NO. 47/M/13 C.O. NO. 47/M/13 3 6. AT THE TIME OF HEARING, THE LD. DR HAS NOT PRES SED GROUND NO. 2.4 AND SUBMITTED THAT THE DEPARTMENT HAS ACCEPTED THE ORDE R OF THE LD. CIT(APPEALS) FOR THE ASSESSMENT YEAR 2008-09 AND NO FURTHER APPEAL HAS BEEN PREFERRED. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(APPEALS). 8. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN TH IS CASE, THE LD. CIT(APPEALS) HAS GIVEN A CATEGORICAL FINDINGS THAT THE PROVISIONS OF SECTION 194H ARE NOT APPLICABLE TO ASSESSEES CASE. THE LD. CIT(APPEALS) HAS GIVEN A SIMILAR FINDING FOR THE ASSESSMENT YEAR 2008-09 A LSO. THE DEPARTMENT HAS NOT PREFERRED ANY APPEAL AGAINST THE ORDER OF THE L D. CIT(APPEALS) FOR THE ASSESSMENT YEAR 2008-09 AND THE LD. DR HAS FAIRLY S UBMITTED THAT THE DEPARTMENT HAD ACCEPTED THE ORDER OF THE LD. CIT(AP PEALS). IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(APPEALS) AND A CCORDINGLY, THE APPEAL FILED BY THE REVENUE IS DISMISSED. C.O. NO. 47/MDS/2013 9. THE CROSS OBJECTION FILED BY THE ASSESSEE IS IN SUPPORT OF THE ORDER PASSED BY THE LD. CIT(APPEALS) AND NO SEPARATE ADJU DICATION IS REQUIRED IN I.T.A. I.T.A. I.T.A. I.T.A. NO. NO. NO. NO.3 33 31 11 15 55 5/M/ /M/ /M/ /M/13 1313 13 & && & C.O. NO. 47/M/13 C.O. NO. 47/M/13 C.O. NO. 47/M/13 C.O. NO. 47/M/13 4 VIEW OF THE DISMISSAL OF THE APPEAL FILED BY THE RE VENUE IN I.T.A. NO. 315/MDS/2013. ACCORDINGLY, THE CROSS OBJECTION FILE D BY THE ASSESSEE STANDS DISMISSED AS INFRUCTUOUS. 10. IN THE RESULT, THE APPEAL OF THE REVENUE AND T HE CO OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 22 ND OF AUGUST, 2013 AT CHENNAI. SD/ - SD/ - (N.S. SAINI) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 22.08.2013 VM/- TO: THE ASSESSEE/A.O./CIT(A)/CIT/D.R.