ACIT CIR 4(3), MUMBAI V. MANGAL KESHAV SECURITIES LTD, MUMBAI

ITA 121/MUM/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3939 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-10-2010
• Assessment Year: 2007-2008
• Appeal Filed On: 07-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SONGATE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.V.EASWAR, PRESIDENT AND SHRI R.S.SYAL , AM ITA NO.121/MUM/2010 : ASST. YEAR 2007-2008 THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 4(3) MUMBAI. VS. M/S.MANGAL KESHAV SECURITIES LIMITED 501, HERITAGE PLAZA, OPP.INDIA OIL NAGAR J.P.ROAD, ANDHERI (WEST) MUMBAI 400 053. PA NO.AAACM8597F. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D.SONGATE RESPONDENT BY : SHRI NISHANT THAKKAR O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 18.10.2009, IN RELATION TO THE ASSESSMENT YEAR 2007-2008. 2. THE ONLY ISSUE IN THIS APPEAL IS AGAINST THE DE LETION OF ADDITION MADE ON ACCOUNT OF PENALTY PAID TO STOCK EXCHANGE AMOUNTING TO RS.6,83,507 IN VIOLATION OF THE BYE-LAWS OF THE STOCK EXCHANGE. BRIEFLY STAT ED THE FACTS OF THE CASE ARE THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF SHARE A ND STOCK BROKER AS MEMBER OF BOMBAY STOCK EXCHANGE AND NATIONAL STOCK EXCHANGE E TC. A SUM OF RS.6,83,507 WAS CLAIMED BY IT TOWARDS PENALTY PAID TO STOCK EXC HANGE. THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE DISALLOWANCE WAS TO BE MADE IN THE LIGHT OF EXPLANATION TO SECTION 37(1). HE, THEREFORE, MADE THE ADDITION, WHICH CAME TO BE DELETED IN THE FIRST APPEAL. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS NOTED THAT THE PENALTY WAS PAID BY THE ASSESSEE ON ACCOUNT OF EXECUTION OF TRADES WITHOUT SUBMISSION OF PAN CARD BY THE CLI ENTS, NON-SUBMISSION OF UNIQUE ITA NO.121/MUM/2010 M/S.MANGAL KESHAV SECURITIES LIMITED. 2 CLIENT CODE DETAILS, INSPECTION, EXECUTION OF OPTIO N TRADES, SHORT DELIVERY, MARGIN VIOLATION FEES. FROM THE VERY NATURE OF THE AMOUNTS PAID IT IS PALPABLE THAT THERE IS NO INFRACTION OF LAW BY THE ASSESSEE AS CONTEMPLATE D IN EXPLANATION TO SEC. 37(1). IT IS ONLY A CASE OF CERTAIN IRREGULARITIES COMMITT ED WHILE CARRYING ON THE BUSINESS IN NORMAL COURSE. VARIOUS BENCHES OF THE TRIBUNAL HAVE CONSISTENTLY TAKEN VIEW IN ASSESSEES FAVOUR IN SUCH CIRCUMSTANCES. THE LD. A R HAS PLACED ON RECORD COPIES OF SUCH ORDER IN GOLDCREST CAPITAL MARKETS LTD. VS. ITO [(2010) 130 TTJ 446 (BOM.) AND MASTER CAPITAL SERVICES LTD. VS. DCIT [ (2007) 108 TTJ 0389 (CHD.)], ETC. IN OUR CONSIDERED OPINION, THE LEARNED CIT(A) WAS JUSTIFIED IN ORDERING FOR THE DELETION OF THIS ADDITION. WE, THEREFORE, UPHOLD TH E IMPUGNED ORDER. 4. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 4 TH DAY OF NOVEMBER, 2010. SD/- SD/- ( R.V.EASWAR ) ( R.S.SYAL ) PRESIDENT ACCO UNTANT MEMBER MUMBAI : 4 TH NOVEMBER, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - VIII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.