M.D. SHUKLA SHARES & SECURITIES P. LTD, MUMBAI V. ITO 4(3)(3), MUMBAI

ITA 1558/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6389 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-11-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 06-03-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P N DEVADASAN
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Business expenditure
• Section: 37(1); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, B, MUMBAI BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) M/S M D SHUKLA SHARES AND SECURITIES P LTD. PG-8, ROTUNDA, ROOM NO.1, GROUND FL. B S MARG, MUMBAI-400024 PAN: AACCM3459J APPELLANT VS THE INCOME TAX OFFICER, WARD-4(3)(3), AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 RESPONDENT ASSESSEE BY : SHRI SANJAY R PARIKH REVENUE BY : SHRI P N DEVADASAN O R D E R PER VIJAY PAL RAO,JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 01.01.2009 OF THE LEARNED CIT(A)-, MUMB AI FOR THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: 1. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER OF THE INCOME TAX OFFICER ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 2 DISALLOWING THE APPELLANTS CLAIM OF TURNOVER CHARG ES AMOUNTING TO RS.46,248; 2. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ORDER OF THE AO DISALLOWING CLEARING HOUSE CHARGES AMOUNTING TO RS.86,240/- PAID TO THE STOCK EXCHANGE; 3. THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN UPHOLDING THE ORDER OF THE AO DISALLOWING THE SECURITY TRANSACTION TAX (STT) OF RS. 1,31,207/- PA ID WITH RESPECT TO TRANSACTION WITH LIC 3. GROUND NO.1 AND 2 REGARDING DISALLOWANCE OF TURN OVER CHARGES AND CLEARING HOUSE CHARGES. THE ASSESSEE I S A STOCK BROKER. THE AO HAS DISALLOWED THE AMOUNT PAID TO T HE STOCK EXCHANGE BEING TURNOVER CHARGES AND CLEARING HOUSE CHARGES ON THE GROUND THAT THE ASSESSEE HAS NOT MADE TDS ON SUCH EXPENDITURE AND THEREFORE, THE SAME WAS IN VIOLATI ON OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE INCOME TAX A CT, 1961. 4. ON APPEAL, THE CIT(A) CONFIRMED THE ACTION OF T HE AO. 5. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THE TURNOVER CHARGE AND CLEARING HO USE CHARGES PAID TO THE STOCK EXCHANGE WAS NOT IN THE N ATURE OF TECHNICAL OR PROFESSIONAL CHARGES, THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE O N SUCH CHARGES. HE HAS SUBMITTED THAT CLEARING HOUS E CHARGES ARE SIMILAR TO THAT OF VSAT CHARGES, LEASE LINE CHARGES, STT CHARGES, THEREFORE, HE HAS SUBMITTED T HAT PRINCIPALLY THIS ISSUE IS COVERED BY VARIOUS DECISI ONS OF ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 3 THIS TRIBUNAL INCLUDING THE DECISION IN KOTAK SECUR ITIES LIMITED V/S ACIT REPORTED IN 24 DTR 214 (MUM). 6. ON THE OTHER HAND, THE LEARNED DR HAS RELIED UPO N THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT IN THE CASE OF KOTAK SECURITIES LIMITED (SUPRA) NO SUCH ISSUE O F CLEARING HOUSE CHARGES WAS INVOLVED. THEREFORE, THE DECISION OF THIS TRIBUNAL IN THE CASE OF KOTAK SECURITIES LIMITED IS NOT APPLICABLE. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND REL EVANT RECORD. AS IT IS EVIDENT FROM RECORD THAT THE PAY MENT ON ACCOUNT OF TURNOVER CHARGES AND CLEARING HOUSING C HARGES MADE TO THE STOCK EXCHANGE ARE NOT IN THE NATURE OF TECHNICAL OR PROFESSIONAL CHARGES, THEREFORE, THE DECISION OF THIS TRIBUNAL IN RESPECT OF VSAT, STT AND LEASE LINE CH ARGES ARE PRINCIPALLY APPLICABLE IN RESPECT OF TURNOVER CHAR GES AND CLEARING HOUSES CHARGES. THIS TRIBUNAL HAS DECIDED THE PAYMENT MADE BY STOCK-BROKER TO THE STOCK EXCHANGE IN RESPECT OF VARIOUS SERVICES AVAILED BEING THE MEMB ER OF THE STOCK EXCHANGE IN FAVOUR OF THE ASSESSEE IN VARIO US CASES. THE ASSESSEE HAS RELIED UPON THE DECISION OF THIS TRIBUNAL IN THE CASE OF DCIT 4(1) V/S M/S. ANGEL BROKING LTD. IN I.T.A.NO. 7031/MUM/08 (ASSESSMENT YEAR : 2005-06) ORDER DATE D : 9 TH DECEMBER, 2009 REPORTED IN 35 SOT 457. WE NOTE THA T THIS ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 4 TRIBUNAL HAS DECIDED THE ISSUE OF VSAT,STT AND LEA SE LINE CHARGE ETC IN PARAGRAPH 10 AS UNDER : 10. WE HAVE ALREADY GIVEN NATURE OF VSAT CHARGES AND LEASE LINE CHARGES, OTHER CHARGES, BOLT CHARGES, DEMAT CHARGES, PAID BY THE ASSESSEE. STOCK EXCHANGES AS MEASURE OF PROVIDING INFRASTRUCTURE TO ITS MEMBERS INSTALLS VSAT, LEASE LINE FACILITIES, BOLT CHARGES AND DEMAT CHARGES TO ITS MEMBERS. FEES COLLECTED IN THIS REGARD IS NOTHING B UT FEE PAID FOR USE OF FACILITIES PROVIDED BY THE STOC K EXCHANGE. SUCH FACILITIES ARE AVAILABLE FOR USE BY ANY MEMBER. SATELLITE BASED TRADING ENABLES TRADING MEMBER TO TRADE ON EXCHANGE FROM THEIR PLACE OF WOR K ACROSS THE COUNTRY. STOCK EXCHANGE HAS TO GET PERMISSION OF DEPARTMENT OF TELECOMMUNICATION FOR INSTALLING AND SETTING UP VSAT OR LEASE LINE SYSTEM . CHARGES LEVIED BY THE STOCK EXCHANGE ON ITS MEMBERS ARE FOR THE PURPOSE OF RECOVERY OF ITS COST IN PROV IDING THESE FACILITIES TO THE MEMBERS. STOCK EXCHANGES DO NOT PROVIDE ANY TECHNICAL SERVICES BY INSTALLING VS AT NETWORK. IT IS THE FACILITY PROVIDED TO ITS MEMBERS , SUCH PAYMENT CANNOT BE SAID TO BE NATURE OF FEES FO R ANY TECHNICAL SERVICES RENDERED. STOCK EXCHANGES MERELY PROVIDE FACILITIES FOR ITS MEMBERS TO PURCHA SE AND SELL SHARES WITHIN FRAME WORK OF ITS BYLAWS. IT ALSO PROVIDES FOR A MECHANISM FOR SETTLEMENT OF DISPUTE BETWEEN THE BROKERS AND ITS CUSTOMERS. STOCK EXCHANGES DO NOT INVOLVE THEM IN PROVIDING ANY TECHNICAL SERVICES TO ANY OF ITS MEMBERS. WE ARE OF THE VIEW THAT THIS RATIO OF HON'BLE MADRAS HIGH COU RT WILL APPLY TO THE FACTS OF THE PRESENT CASE. THE ASSESSING OFFICER IN COMING TO THE CONCLUSION THAT THE PAYMENT WAS FOR FEE FOR TECHNICAL SERVICES HAS RELI ED ON THE FACT THAT THE SCREEN BASED TRADING IS SOPHISTICATED METHOD OF TRADING. THIS BY ITSELF WIL L NOT BE SUFFICIENT TO HOLDING TECHNICAL SERVICES BEING RENDERED. THE ASSESSING OFFICER HAS ALSO HELD THAT SERVICES ARE NOT AVAILABLE TO THE PUBLIC AT LARGE B UT ONLY TO REGISTERED MEMBERS, AGAIN THIS BY ITSELF WI LL NOT MAKE THE SERVICES IN QUESTION AS TECHNICAL SERVICES. ANOTHER REASON GIVEN BY THE ASSESSING OFFICER IS THAT SPEED AT WHICH TRANSACTIONS WERE COMPLETED AND THE EASE WITH WHICH TRANSACTIONS ARE ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 5 DONE IN SCREEN BASED TRADING. THIS AGAIN IS NOT RELEVANT CRITERIA FOR HOLDING THAT THE SERVICES REN DERED WERE TECHNICAL SERVICES. FACT THAT THE DATA PROVIDE D ON SCREEN WILL PROVIDE BETTER DATA FOR CARRYING OUT TRANSACTION WILL NOT AGAIN BE SUFFICIENT TO HOLD TH AT TECHNICAL SERVICES ARE BEING RENDERED. ALL THE ABOV E FEATURES PRESENT IN SCREEN BASED TRADING SAVES TIME . THIS IS THE RESULT OF IMPROVED TECHNOLOGY. THAT DOE S NOT MEAN THAT STOCK EXCHANGE IS PROVIDING TECHNICAL SERVICES. MEMBERS OF THE STOCK EXCHANGE AND THE PUBLIC AT LARGE ARE BENEFICIARIES OF THESE TECHNICA L IMPROVEMENTS. STOCK EXCHANGES ARE NOT THE OWNER OF THIS TECHNOLOGY TO PROVIDE THEM FOR A FEE TO PROSPECTIVE USE. THEY ARE THEMSELVES CONSUMERS OF THE TECHNOLOGY. WE ARE THEREFORE OF THE VIEW THAT LEARNED CIT(A) WAS RIGHT IN HOLDING THAT THE PAYMEN T IN QUESTION IS NOT FEE FOR TECHNICAL SERVICES RENDE RED. WE THEREFORE CONFIRM THE ORDER OF LEARNED CIT(A) AN D DISMISS THIS APPEAL OF THE REVENUE. 8. WE FURTHER NOTE THAT THIS TRIBUNAL HAS DECIDED THE ISSUE OF TRANSACTION CHARGES IN THE CASE OF ACIT V/S M/S TECHNO SHARES AND STOCKS LTD IN ITA NO.5529/MUM/2009(AY 20 06-07) ORDER DATED 8.10.2010 IN WHICH VIDE PARAGRAPH 9 AS UNDER : 9. AFTER HEARING THE LEARNED DR, WE FIND THAT THE ISSUE IS COVERED BY THE DECISION OF THE ITAT. THE ITAT IN KOTAK SECURITIES LTD V. ADDL. CIT (2009) 3 18 ITR (AT) 268 (MUMBAI) HELD THAT TRANSACTION FEES PAID TO THE STOCK EXCHANGE COULD NOT BE SAID TO BE A FEES PAID IN CONSIDERATION OF STOCK EXCHANGE RENDERING ANY TECHNICAL SERVICES TO THE ASSESSEE. THE PROVISIONS OF SECTION 9(1) (VII), EXPLANATION 2 , WERE, THEREFORE, NOT ATTRACTED. THEREFORE, THERE W AS NO OBLIGATION ON THE PART OF THE ASSESSEE TO DEDUCT TAX AT SOURCE. CONSEQUENTLY, THE PROVISIONS OF SECTION 40(A)(IA) WERE ALSO NOT ATTRACTED AND, THEREFORE THE DISALLOWANCE MADE WAS DELETED . IN THE LIGHT OF THE DECISION OF THE ITAT, WE HEREBY CONFIRM THE ORDER OF CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF TRANSACTION CHARGES OF RS.5,03,359/-, LEASELINE CHARGES OF RS.8,80,116/- AND VSAT CHARGES OF ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 6 RS.9,72,381/- AGGREGATING TO RS.22,55,906/- AND FINDING ON MERIT 9. IN VIEW OF THE ABOVE DECISIONS, WE ARE OF THE VI EW THAT THE TURNOVER CHARGES AND CLEARING HOUSE CHARGES ARE NOT FOR PROVIDING THE TECHNICAL SERVICES BY THE STOCK EXC HANGE BUT ARE THE CHARGES LEVIED BY THE STOCK EXCHANGE ON ITS MEMBERS FOR THE PURPOSES OF PROVIDING FACILITIES. NO TDS WAS REQUIRED TO BE DEDUCTED. ACCORDINGLY, WE DECIDE THESE ISSUE S IN FAVOUR OF THE ASSESSEE. 10. GROUND NO,. 3 REGARDING THE DISALLOWANCE OF ST T PAID. THE ASSESSEE CLAIMED SECURITY TRANSACTION TAX OF RS.1,31,207/- AS ALLOWABLE DEDUCTION. THE AO ASKE D THE ASSESSEE TO EXPLAIN THE NATURE OF PAYMENT OF STT A ND ALSO ASKED TO SHOW THE CAUSE AS TO WHY THE SAME SHOULD N OT BE DISALLOWED AS PER THE PROVISIONS OF SECTION 40(A)(B ). IN RESPONSE, THE ASSESSEE VIDE LETTER DATED 14.11.2007 SUBMITTED THAT AS PER THE BUSINESS ARRANGEMENT WITH THE LIC AND OTHER INSTITUTIONS AS WELL AS PER THE MARKET PRACTICE THE INSTITUTIONS GIVE THE BROKERAGE AS INCLUSIVE WHICH INCLUDES THE STATUTORY EXPENSES TO BE BORN BY THE ASSESSEE. IN NUTSHELL, THE ASSESSEE SUBMITTED THAT STT WAS PAID BY THE ASSESSE E ON BEHALF OF THE LIC. THEREFORE, IT IS ALLOWABLE DED UCTION. THE ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 7 AO DISALLOWED THE CLAIM OF THE ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 40(A)(B). 11. ON APPEAL, THE CIT(A) CONFIRMED THE DISALLOWAN CE MADE BY THE AO. 12. BEFORE US, THE LEARNED AR HAS REITERATED THE SUBMISSIONS AS MADE BEFORE THE LOWER AUTHORITIES AN D SUBMITTED THAT MAJORITY OF THE INCOME OF THE ASSESS EE IS FROM THE LIC OF INDIA AND AS PER THE ARRANGEMENT AND SYS TEM OF BUSINESS WITH THE LIC, THE ASSESSEE HAS TO BORN STA TUTORY EXPENSES INCLUDING THE STT. THE LEARNED AR HAS SUBMITTED THAT THE INSTITUTIONS DO NO ALLOW THE ASSESSEE TO C HARGE THEM SEPARATELY OR ANY REIMBURSEMENT OF THE EXPENDITURE3 . THEREFORE, THE BROKERAGE INCOME HAS SHOWN IN GROSS AND THE STATUTORY EXPENSES BORN BY THE ASSESSEE WAS SHOWN AS AN EXPENDITURE. THUS, THE LEARNED AR HAS PLEADED THAT THE EXPENDITURE INCURRED BY THE ASSESSEE IS INCIDENTAL AND INCURRED FOR EARNING THE BROKERAGE INCOME AND THERE FORE THE SAME IS ALLOWABLE U/S 37(1) OF THE ACT.. 13. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THERE IS A STATUTORY PROHIBITION AGAINST THE ALLOWA NCE OF STT ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 8 AS PER THE PROVISIONS OF SECTION 40(AI)(B). HE HAS RELIED UPON THE ORDERS OF THE LOWER AUTHORITY. 14. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND RE LEVANT RECORD AND ALSO GONE THROUGH THE PROVISIONS OF SECT ION 40(A)(IB) OF THE ACT AS EXISTS AT THE RELEVANT POIN T OF TIME WHICH ARE PRODUCED BELOW : AMOUNTS NOT DEDUCTIBLE. 40. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN SECTIONS 30 TO [ 38 ], THE FOLLOWING AMOUNTS SHALL NOT BE DEDUCTED IN C OMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND G AINS OF BUSINESS OR PROFESSION, (A) IN THE CASE OF ANY ASSESSEE [(I) ANY INTEREST (NOT BEING INTEREST ON A LOAN I SSUED FOR PUBLIC SUBSCRIPTION BEFORE THE 1ST DAY OF APRIL, 19 38), ROYALTY, FEES FOR TECHNICAL SERVICES OR OTHER SUM CHARGEABLE UNDER THIS ACT, WHICH IS PAYABLE, (A) OUTSIDE INDIA; OR (B) IN INDIA TO A NON-RESIDENT, NOT BEING A COMPAN Y OR TO A FOREIGN COMPANY, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTE R XVII- B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDU CTION, HAS NOT BEEN PAID DURING THE PREVIOUS YEAR, OR IN THE S UBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200 : PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEE N DEDUCTED IN ANY SUBSEQUENT YEAR OR, HAS BEEN DEDUCT ED IN THE PREVIOUS YEAR BUT PAID IN ANY SUBSEQUENT YEAR AFTER THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200 , SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING TH E INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS BEEN PAID. EXPLANATION.FOR THE PURPOSES OF THIS SUB-CLAUSE, (A) ROYALTY SHALL HAVE THE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE (VI) OF SUB-SECTION (1) OF SECTION 9 ; ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 9 (B) FEES FOR TECHNICAL SERVICES SHALL HAVE THE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB- SECTION (1) OF SECTION 9 ; (IA)ANY INTEREST, COMMISSION OR BROKERAGE, [ RENT, ROYALTY, ] FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SER VICES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR O R SUB- CONTRACTOR, BEING RESIDENT, FOR CARRYING OUT ANY WO RK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK), ON WHI CH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAI D DURING THE PREVIOUS YEAR, OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200 : PROVIDED THAT WHERE IN RESPECT OF ANY SUCH SUM, TAX HAS BEEN DEDUCTED IN ANY SUBSEQUENT YEAR OR, HAS BEEN D EDUCTED IN THE PREVIOUS YEAR BUT PAID IN ANY SUBSEQUENT YEA R AFTER THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200 , SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPU TING THE INCOME OF THE PREVIOUS YEAR IN WHICH SUCH TAX HAS B EEN PAID. EXPLANATION.FOR THE PURPOSES OF THIS SUB-CLAUSE, (I) COMMISSION OR BROKERAGE SHALL HAVE THE SAME MEANING AS IN CLAUSE (I) OF THE EXPLANATION TO SECTION 194H ; (II)FEES FOR TECHNICAL SERVICES SHALL HAVE THE SA ME MEANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9 ; (III)PROFESSIONAL SERVICES SHALL HAVE THE SAME ME ANING AS IN CLAUSE (A) OF THE EXPLANATION TO SECTION 194J ; (IV)WORK SHALL HAVE THE SAME MEANING AS IN EXPLAN ATION III TO SECTION 194C ; [ (V)RENT SHALL HAVE THE SAME MEANING AS IN CLAUSE (I) TO THE EXPLANATION TO SECTION 194-I; (VI)ROYALTY SHALL HAVE THE SAME MEANING AS IN EXP LANATION 2 TO CLAUSE (VI) OF SUB-SECTION (1) OF SECTION 9; ] (IB)ANY SUM PAID ON ACCOUNT OF SECURITIES TRANSACTI ON TAX UNDER CHAPTER VII OF THE FINANCE (NO. 2) ACT, 2004;] ( UNDERLINES OURS) ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 10 15. UNDISPUTEDLY, STT IS NOT ALLOWED AS AN EXPENDIT URE IN VIEW OF THE PROVISIONS OF SECTION 40(A)(IB). EVEN OTHERWISE, THE STT MAY BE AN EXPENDITURE WHICH WOULD BE TREAT ED AS PART OF THE COST OF THE SECURITY AND THEREFORE, THE SAME CANNOT BE ALLOWED AS BUSINESS EXPENDITURE IN VIEW OF THE P ROVISIONS OF SECTION 40(A)(IB). THE ONLY CONTENTION OF THE A SSESSEE FOR CLAIMING THE STT IS ALLOWABLE AS AN EXPENDITURE IS THAT AS PER THE BUSINESS ARRANGEMENT THE ASSESSEE HAS TO BO RN THE EXPENDITURES INCLUDING THE STT. AS PER THE CONTENT IONS AND THE CLAIM OF THE ASSESSEE, THE MAJORITY OF THE TRAN SACTIONS ARE MADE ON BEHALF OF THE LIC. BUT, IN THE ABSENCE O F ANY AGREEMENT AND OTHER WRITTEN MATERIAL WHERE BY THE P ARTIES HAVE AGREED THAT THE ASSESSEE HAS TO BE BORN THE STT ON THE TRANSACTIONS MADE ON BEHALF OF THE LIC IT CANN OT BE ALLOWED AS AN BUSINESS EXPENDITURES MERELY ON THE B ASIS OF SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE. THE A SSESSEE HA SNOT PRODUCED ANY RECORD OR MATERIAL EVEN BEFORE US IN SUPPORT OF ITS CONTENTIONS. THEREFORE, WE DO NOT F IND ANY ERROR OR ILLEGALITY IN THE ORDERS OF THE LOWER AUTHORITIE S QUA THIS ISSUE. 16. THIS GROUND IS DISMISSED. ITA NO. 1558/MUM/2009 (ASSESSMENT YEAR 2005-06) 11 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 26.11.2010 SD SD (T.R.SOOD) (VIJA Y PAL RAO) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI, DATED 26 TH NOV 2010 SRL:151110 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI