DCIT. CIR-4(2)(1), MUMBAI V. M/S. SHCIL SERVICES LTD., MUMBAI

ITA 1600/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 8089 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 18-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA L D
• Section: 143(3); 194J; 13

Judgement Text

ITA NO.1600 & 1601/MUM/2019 M/S. SHCIL SERVICES LTD. ASSESSMENT YEARS: 2013-14 & 2015-16 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.1600/MUM/2019 ( / ASSESSMENT YEAR: 2013-14) & ./ I.T.A. NO.1601/MUM/2019 ( / ASSESSMENT YEAR: 2015-16) D CIT - 4 ( 2 )( 1 ) ROOM NO.642, 6 TH FLOOR AAYKAR BHAVAN, M.K. ROAD MUMBAI-400 020. / VS. M/S. S CH IL SERVICES LTD. C/O.KALYANIWALLA & MISTRY ARMY & NAVY BLDG. 3 RD FLOOR, 148 M.G. ROAD FORT, MUMBAI-400 001. !' ./ ./PAN/GIR NO. AAJCS-5661-H ( '$ /APPELLANT ) : ( %& '$ / RESPONDENT ) ASSESSEE BY : CASE LAW COMPILATION VIDE LETTER DT.12/01/2021 REVENUE BY : SHRI T.S. KHALSA- LD. SR.DR / DATE OF HEARING : 12/01/2021 / DATE OF PRONOUNCEMENT : 12/01/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE FACTS AS WELL AS ISSUES IN BOTH THE APPEALS OF REVENUE FOR ASSESSMENT YEARS 2013-14 AND 2015-16 ARE STATED TO BE IDENTICAL AND THEREFORE, THE APPEALS WERE HEARD TOGETHER AND ARE NOW BEING DISPOSED-OFF BY WAY OF THIS COMMON ORDER FOR THE SA KE OF CONVENIENCE AND BREVITY. THE APPEAL FOR AY 2013-14 ASSAILS THE ITA NO.1600 & 1601/MUM/2019 M/S. SHCIL SERVICES LTD. ASSESSMENT YEARS: 2013-14 & 2015-16 2 ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-9 , MUMBAI [IN SHORT CIT(A)], ORDER DATED 24/01/2019 ON FOLLOWING GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN NOT ACCEPTING THE FACT THAT THE PAYMENT MADE TO M/S. STOCK HOLDING CORPORATION OF INDIA LTD., BEING A HOLDING COMPANY OF THE ASSES SEE FALLS WITHIN THE PREVIEW OF SECTION 194J OF THE I. T. ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) FURTHER ERRED IN NOT CONFIRMING THE ACTION OF THE A O THAT THE PAYMENTS OF SUB- BROKERAGE PAID BY THE ASSESSEE FALLS UNDER SECTION 194H OF THE I.T. ACT. 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE TOTAL SUB-BROKERAGE OF RS.2,5 8,72,096/- INCURRED BY THE ASSESSEE. AS EVIDENT, THE REVENUE IS AGGRIEVED BY DELETION OF DISALLOWANCE OF SUB-BROKERAGE CHARGES FOR RS.258.72 LACS. 2. WE HAVE CAREFULLY HEARD THE RELEVANT SUBMISSIONS AND PERUSED RELEVANT MATERIAL ON RECORD INCLUDING DECIS IONS FILED BY THE ASSESSEE VIDE LETTER DATED 12/01/2021. OUR ADJUDICA TION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCE EDING PARAGRAPHS. 3. THE MATERIAL FACTS ARE THAT THE ASSESSEE BEING R ESIDENT CORPORATE ASSESSEE IS STATED TO BE ENGAGED IN SHARE -BROKING AND PROVIDING PORTFOLIO MANAGEMENT SERVICES. AN ASSESSM ENT WAS FRAMED FOR THE YEAR UNDER CONSIDERATION U/S. 143(3) ON 22/02/2016 WHEREIN IT WAS SADDLED WITH A SUB-BROKERAGE EXPENSE DISALLOWANCE OF RS.258.72 LACS. THE SAME STEM FROM THE FACT THAT THE ASSESSEE PAID SUB-BROKERAGE CHARGES OF RS.1552.32 LACS TO IT S PARENT COMPANY M/S. STOCK HOLDING CORPORATION OF INDIA LTD . AFTER DEDUCTION OF TAX AT SOURCE U/S 194J. THE BROKERAGE WAS PAID @60% OF GROSS BROKERAGE AS AGAINST 50% PAID IN AY 2 009-10 WHICH WAS INCREASED TO 75% IN AY 2010-11 BUT REDUCE D TO 60% FROM SECOND HALF OF AY 2011-12. THE LD. AO RESTRICT ED THE ITA NO.1600 & 1601/MUM/2019 M/S. SHCIL SERVICES LTD. ASSESSMENT YEARS: 2013-14 & 2015-16 3 DEDUCTION TO 50% AND DISALLOWED 10%, TREATING THE S AME TO BE UNREASONABLE AND EXCESSIVE IN TERMS OF SEC. 40A(2)( B). 4. UPON FURTHER APPEAL, LD. CIT(A), RELYING UPON TR IBUNALS DECISION IN ASSESSEES OWN CASE FOR AYS 2010-11 & 2 011-12 WHICH WAS FOLLOWED IN APPELLATE ORDER FOR AY 2011-12, DEL ETED THE ADDITION. AGGRIEVED, THE REVENUE IS IN FURTHER APP EAL BEFORE US. 5. UPON CAREFUL CONSIDERATION OF FACTUAL MATRIX, WE FIND THAT LEARNED CIT(A) HAS MERELY FOLLOWED THE BINDING DECI SION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AYS 2010-11 & 2 011-12. THE REVENUE AGITATED THE STAND OF TRIBUNAL BEFORE HONB LE BOMBAY HIGH COURT VIDE ITA NO.1486 OF 2016 FOR AY 2011-12 ORDER DATED 06/02/2019 AND ITA NO,1272 OF 2017 FOR AY 2010-11 O RDER DATED 06/01/2020 WHEREIN HONBLE COURT HAS REFUSED TO ADM IT THE APPEAL FOR BOTH THE YEARS. SIMILAR IS THE VIEW OF THE TRIB UNAL FOR AY 2012- 13 (ITA NOS.206, 279/MUM/2017 ORDER DATED 29/11/201 9) AS WELL AS IN AY 2014-15 (ITA NO.1811/MUM/2019 ORDER DATED 07/12/2020). HENCE, NO INFIRMITY COULD BE FOUND IN THE IMPUGNED ORDER. ACCORDINGLY, THE REVENUES APPEAL STAND DISM ISSED. 6. SIMILAR ARE THE FACTS AS WELL AS ISSUES IN REVEN UES APPEAL FOR 2015-16 WHEREIN LD. AO RESTRICTED THE SUB-BROKERAGE CHARGES TO 50%. HOWEVER, LD. CIT(A) DELETED THE SAME ON SIMILA R LOGIC AND REASONING. SINCE FACTS ARE PARI-MATERIA THE SAME, F OLLOWING OUR ADJUDICATION IN AY 2013-14, WE DISMISS THE APPEAL. ITA NO.1600 & 1601/MUM/2019 M/S. SHCIL SERVICES LTD. ASSESSMENT YEARS: 2013-14 & 2015-16 4 7. BOTH THE APPEALS STANDS DISMISSED. ORDER PRONOUNCED ON 12 TH JANUARY, 2021. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 12/01/2021 SR.PS, JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. - ( ) / THE CIT(A) 4. - / CIT CONCERNED 5. ./% ( 0 , 0 , / DR, ITAT, MUMBAI 6. /123 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.