Sundaram Asset Management Co. Ltd., CHENNAI V. DCIT, CHENNAI

ITA 1774/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2478 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 29-05-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 27-09-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T N BETGIRI
• Assessee Lawyers: R PARTHASARATHY
• Keywords: Capital asset; Depreciation; Non-deduction of tax; Revenue expenditure; Capital expenditure
• Section: 234B; 14A; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI [BEFORE DR. O.K.NARAYANAN, VICE PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER] I.T.A. NO. 17 74 /MDS/2012 ASSESSMENT YEAR : 2008-09 SUNDARAM ASSET MANAGEMENT CO. LTD., SUNDARAM TOWERS, II FLOOR, NO. 46, WHITES ROAD, CHENNAI 600 014 VS DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAXPAYER UNIT, CHENNAI. [PAN : A AICS 4257 J ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R. PARTHASARATHY, ADVOCATE & SHRI SUMEET KHURANA, FCA RESPONDENT BY : SHRI T.N. BETGIRI, JCIT DATE OF HEARING : 29-05-2013 DATE OF PRONOUNCEMENT : 19-07-2013 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XI I, CHENNAI DATED 03-07-2012 RELEVANT TO THE ASSESSMENT YEAR (A Y) 2008-09. I.T.A. NO. 1774/MDS/2012 :- 2 -: 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ASSET MANAGEMENT. FOR THE AY. 2008-09, THE ASSESSEE FI LED ITS RETURN OF INCOME ON 26-09-2008 DECLARING ITS TOTAL INCOME AS RS. 20,86,48,690/- UNDER NORMAL PROVISIONS AND RS. 26,1 2,06,395/- U/S. 115JB (MAT PROVISIONS) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT). THE CASE OF THE A SSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) WAS IS SUED TO THE ASSESSEE ON 12-08-2009. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 24-11-2010 MADE ADDITIONS/DI S- ALLOWANCES IN THE INCOME RETURNED BY THE ASSESSEE O N FOLLOWING COUNTS: I. DIS-ALLOWANCE U/S. 14(A)(I) R.W.RULE 8D RS. 6,28 ,950/-. II. DIS-ALLOWANCE U/S. 40(A)(I) RS. 33,48,666/- ON ACCOUNT OF NON-DEDUCTION OF TAX AT SOURCE U/S. 195 ON THE PAYMENTS MADE TO M/S. FUND QUEST A NON-RESIDENT FIRM. III. DIS-ALLOWANCE U/S. 40(A)(IB) RS. 85,929/- IN R ESPECT OF SECURITIES TRANSACTION TAX. I.T.A. NO. 1774/MDS/2012 :- 3 -: IV. CAPITALIZATION OF EXPENSES ON EXTENSION AND RENOVATION OF BUILDING THE ASSESSEE HAD CLAIMED A N AMOUNT OF RS. 2,06,61,216/- ON ACCOUNT OF INTERIOR DECORATION, EXTENSION AND RENOVATION OF THE OFFICE PREMISES AS REVENUE EXPENDITURE. THE ASSESSING OFFICER HELD THE EXPENDITURE TO BE CAPITAL IN NATUR E AND MADE ADDITION OF RS. 1,85,95,094/- AFTER ALLOW ING DEPRECIATION. V. DIS-ALLOWANCE OF EXCESS DEPRECIATION ON UPS. TH E ASSESSEE HAD CLAIMED DEPRECIATION ON UPS @ 60%, AS APPLICABLE TO COMPUTER HARDWARE. THE ASSESSING OFFICER ALLOWED DEPRECIATION AS APPLICABLE TO PLANT & MACHINERY I.E., 15%. THE ASSESSING OFFICER MADE ADDITION OF RS. 18,68,338/- AFTER DIS-ALLOWING THE EXCESS DEPRECIATION. VI. INVESTMENT MANAGEMENT FEE RS. 15,82,291/- . VII. DIS-ALLOWANCE U/S. 40(A)(IA) RS. 16,41,14,706/ - ON PAYMENTS MADE TO THE MUTUAL FUND DISTRIBUTORS. I.T.A. NO. 1774/MDS/2012 :- 4 -: APART FROM THE ABOVE ADDITIONS, THE ASSESSING OFFIC ER RE- COMPUTED BOOK PROFIT UNDER MAT PROVISIONS U/S. 115J B AND MADE ADDITION OF RS. 6,28,950/- U/S. 14A AND RS. 61,50,2 20/- ON ACCOUNT OF LONG TERM CAPITAL GAINS. AGGRIEVED AGAI NST THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS)-CHENNAI. THE CIT(APPEALS) VIDE IMPUGN ED ORDER DT. 03-07-2012 DISMISSED AND APPEAL OF THE ASSESSEE . 3. NOW, THE ASSESSEE HAS COME IN SECOND APPEAL BEFO RE THE TRIBUNAL IMPUGNING THE ORDER OF THE CIT(APPEALS)-XI I, CHENNAI. THE GROUNDS STATED IN THE APPEAL ARE AS UNDER: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX(APPEALS) [CIT (APPEALS)], TO THE EXTENT PREJUDICIAL TO THE APPELLANT, IS CONTRARY TO LAW, FACTS, AND CIRCUMSTANCES OF THE CA SE. 2. THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER (AO) OF RS. 6,28,95 0/- BY INVOKING THE PROVISIONS OF SECTION 14A OF THE INCOME-TAX ACT (THE ACT) IGNORING THE FACT THAT THE APPELLANT HAD NOT INCURR ED ANY EXPENDITURE FOR EARNING DIVIDEND INCOME. 3. THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE AO TOWARDS PAYMENT OF RS. 33,48,666/- M ADE TO FUND QUEST BY INVOKING THE PROVISIONS OF SECTION 40(A)(I ) OF THE ACT AND I.T.A. NO. 1774/MDS/2012 :- 5 -: STATING THAT THE PAYMENT IS IN THE NATURE OF ROYALT Y FAILING WITHIN THE AMBIT OF PROVISIONS OF SECTION 9 OF THE ACT. 4. THE LEARNED CIT (A) HAS ERRED IN UPHOLDING THE O RDER OF THE AO IN TREATING THE PAYMENT OF RS. 1,85,95,094/- TOWARDS R ENOVATION OF EXISTING LEASE BUILDING AS A CAPITAL EXPENDITURE IG NORING THE FACT THAT THE EXPENDITURE HAS NEITHER RESULTED IN ANY STRUCTU RAL CHANGE TO THE BUILDING NOR IN THE CREATION OF NEW CAPITAL ASSET. 4.1 THE LEARNED CIT (A) HAS ERRED IN NOT FOLLOWING THE PRINCIPLES LAID DOWN IN THE DECISION OF THE HONBLE CHENNAI ITAT IN THE APPELLANTS OWN CASE FOR THE ASSESSMENT YEAR (AY) 2006-07. 5. THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDE R OF AO IN NOT TREATING UPS AS PART OF COMPUTERS AND ADDING BACK R S. 18,68,338/- ON ACCOUNT OF EXCESS DEPRECIATION CLAIM. 5.1 THE LEARNED CIT (A) ERRED IN REJECTING THE ALTE RNATIVE CLAIM OF APPELLANT IN TREATING THE UPS AS ENERGY SAVING DEVI CE AND CLAIMING DEPRECIATION AT THE RATE OF 80 PERCENT ON THE SAME. 6. THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF AO, IN ADDING BACK AN AMOUNT OF RS. 15,82,291/- AS INCOME OF THE APPELLANT BASED ON FORM 16A IGNORING FINANCIAL STAT EMENTS FILED. 7. THE LEARNED CIT (A), HAS ERRED IN UPHOLDING THE ORDER OF THE AO, IN DISALLOWING THE COMMISSION AND BROKERAGE PAYMENT S MADE AMOUNTING TO RS. 16,41,14,706/- TO VARIOUS DISTRIBU TORS OF MUTUAL FUND SCHEMES BY INVOKING PROVISIONS OF SECTION 40(A )(IA) OF THE ACT AND ERRED IN CONCLUDING THAT THE SUM LIABLE TO TAX DEDUCTED AT SOURCE (TDS) UNDER SECTION 194J OF THE ACT. I.T.A. NO. 1774/MDS/2012 :- 6 -: 7.1 THE LEARNED CIT (A) ERRED IN STATING THAT DISTR IBUTORS ARE INVOLVED IN PREPARING PROSPECTUS, MARKETING AND ADV ERTISEMENT WHEN NO SUCH SERVICES WERE ACTUALLY RECEIVED BY THE APPELLANT. 7.2 THE LEARNED CIT (A) ERRED IN STATING THAT PAYME NT TO DISTRIBUTORS IS NOT IN THE NATURE OF COMMISSION OR BROKERAGE WIT HOUT APPRECIATING THE FACT THAT PAYMENTS MADE ARE BASED PURELY ON THE QUANTUM OF UNITS SOLD, IRRESPECTIVE OF LEVEL OF EFF ORTS OF THE DISTRIBUTORS. 7.3 THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED T HE FACT THAT THE SERVICES RENDERED BY THE DISTRIBUTORS DO NOT FALL W ITHIN THE SCOPE OF DEFINITIONS OF PROFESSIONAL OR TECHNICAL SERVICES. 7.4 THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED T HAT THE COMMISSION AND BROKERAGE PAID FALL WITHIN THE AMBIT OF PROVISIONS OF SECTION 194H THAT SPECIFICALLY EXCLUDES PAYMENTS TO WARDS PURCHASE/SALE OF SECURITIES. 7.5 THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED T HE FACT THAT THE ACTION OF THE LEARNED AO IS IN CONTRAVENTION TO THE CIRCULAR NO. 720 DATED 30-08-1995, WHERE THE BOARD HAS CLARIFIED THA T THE PAYMENT FOR ANY SUM SHALL BE LIABLE TO DEDUCTION OF TAX UND ER ONLY ONE SECTION. 7.6 THE LEARNED CIT (A) OUGHT TO HAVE APPRECIATED T HE FACT THAT THE LEARNED AO ERRED IN RELYING ON THE INFORMATION DISP LAYED IN THE WEBSITE OF A THIRD PARTY WHO IS IN THE BUSINESS OF REGISTER AND TRANSFER AGENT. I.T.A. NO. 1774/MDS/2012 :- 7 -: 8. THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF AO, IN COMPUTING THE MINIMUM ALTERNATE TAX UNDER SECTION 1 15JB, BY ADDING A SUM OF RS. 6,28,950/- UNDER SECTION 14A OF THE ACT. 9. THE LEARNED CIT (A) HAS ERRED IN REMANDING BACK THE ISSUE TO THE AO TO EXAMINE THE COMPUTATION OF BOOK PROFIT WITHOU T ADJUDICATING ON THE ISSUE HIMSELF. 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) WAS NOT JUSTIFIED AND ERRED IN NOT DELETING INTERES T LEVIED UNDER SECTION 234B AND 234D OF THE ACT AS THE SAME IS BAD IN LAW. 4. SHRI R. PARTHASARATHY, ADVOCATE WITH SHRI SUMEET KHURANA, CHARTERED ACCOUNTANT APPEARING ON BEHALF OF THE ASS ESSEE SUBMITTED THAT DURING THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE HAD NOT INCURRED ANY EXPENSES IN EARNING DIVIDEND I NCOME. THE ASSESSEE BEING ASSET MANAGEMENT COMPANY HAS THOROUG H KNOWLEDGE AND UNDERSTANDING OF MUTUAL FUNDS BY VIRT UE OF ITS BUSINESS OPERATIONS. THE ASSESSEE HAD NOT TAKEN AN Y FUNDS BEARING INTEREST, THEREFORE, THE ASSESSEE HAS NOT I NCURRED ANY INTEREST COST. THE LD. COUNSEL FOR THE ASSESSEE FU RTHER SUBMITTED THAT PROVISIONS OF RULE 8D WILL NOT APPLY TO SHORT TERM INVESTMENTS, AS THE CAPITAL GAIN ARISING THERE FROM IS TAXABLE. THE LD. COUNSEL CONTENDED THAT THE AUTHORITIES BELOW HAVE NOT GIVE N ANY SPECIFIC FINDING WHILE REJECTING THE CONTENTIONS OF THE ASSE SSEE. THE AR IN I.T.A. NO. 1774/MDS/2012 :- 8 -: SUPPORT OF HIS CONTENTIONS ON THE ISSUE, RELIED ON THE FOLLOWING DECISIONS: 1. MAXOPP INVESTMENT LTD., VS. CIT REPORTED AS 347 ITR 272 (DEL) 2. CIT VS. HERO CYCLES LTD., REPORTED AS 323 ITR 518 (P&H) 3. AVSHESH MERCANTILE PVT. LTD., VS. DCIT IN ITA NO. 5779/MUM/2006 DECIDED ON 13-06-2012. 5. THE LD. COUNSEL ON GROUND NO. 3 OF THE APPEAL SU BMITTED THAT AN AMOUNT OF RS. 33,48,666/- WAS PAID TO M/S. FUND QUEST FOR THE SERVICES RENDERED ABROAD. M/S. FUND QUEST DOES NOT HAVE PE IN INDIA AND THE SERVICES RENDERED BY THEM WERE ADVISORY IN NATURE. THE ASSESSING OFFICER HAS ERRED IN COME IN TO THE CONCLUSION THAT THE PAYMENT IS IN THE NATURE OF RO YALTY. THE ASSESSEE HAD NOT OBTAINED ANY CERTIFICATE U/S. 197 OF THE ACT AS ASSESSEE HAD NO DOUBT THAT THE PAYMENT IS FOR SERVI CES AND NOT IN THE NATURE OF ROYALTY. SINCE, THE SAID AMOUNT IS NOT TAXABLE IN INDIA, THE PROVISIONS OF SECTION 195 ARE NOT APPLIC ABLE. I.T.A. NO. 1774/MDS/2012 :- 9 -: 6. ON THE FOURTH GROUND OF APPEAL RELATING TO REPAI R OF LEASE- HOLD PREMISES, THE LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT AT PAGE 42 OF THE PAPER BOOK, THE DETAILS OF THE EXPE NDITURE HAVE BEEN GIVEN. THE EXPENDITURE RELATES TO DEMOLITION, PAINTING WORK, FLOOR WORK, PARTITION, PLUMBING, FALSE CEILING, STO RAGE, MOLDER WORK, ELECTRICAL WORK AND AC DUCTING. THE LEASE PERIOD O F BUILDING IS THREE YEARS WITH THE OPTION TO RENEW THEREAFTER. A S, THE PREMISES IS BEING USED FOR OFFICE PURPOSE, THE NATURE OF THE EXPENDITURE IS REVENUE. THE ASSESSING OFFICER HAS DIS-ALLOWED AN AMOUNT OF RS. 1,85,95,094/- OUT OF THE TOTAL EXPENDITURE OF R S. 2,06,61,216/-. THE LD. AR IN ORDER TO SUPPORT HIS CONTENTIONS HAS RELIED ON THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN T HE CASE OF M/S. SUNDARAM BNP PARIBAS ASSET MANAGEMENT COMPANY LTD., VS. ACIT IN ITA NO. 518/MDS/2010 DECIDED ON 7 TH JANUARY, 2011. 7. ON THE FIFTH GROUND OF APPEAL RELATING TO DEPREC IATION ON UPS AT 60% AS APPLICABLE TO COMPUTERS, THE LD. COUN SEL SUBMITTED THAT UPS IS INTEGRAL PART OF THE COMPUTER SYSTEM, WITHOUT WHICH THE COMPUTERS WILL NOT BE FULLY OPERA TIONAL. THUS, THE DEPRECIATION AS APPLICABLE IN THE CASE OF COMPU TERS SHOULD BE I.T.A. NO. 1774/MDS/2012 :- 10 - : ALLOWED TO THE ASSESSEE. TO SUPPORT HIS SUBMISSION S, THE COUNSEL RELIED ON THE FOLLOWING DECISIONS: I. DCIT VS. DATACRAFT INDIA LTD., REPORTED AS 9 ITR (TRIB) 712 (MUM-SB); II. HAWORTH (I) P. LTD., VS. DCIT IN ITA NO. 5341/DEL/2010 DECIDED ON 29-04-2011. III. MACAWBER ENGINEERING SYSTEMS (INDIA) P. LTD., VS. ACIT REPORTED AS 19 ITR (TRIB) 302 (MUM) 8. ON THE ISSUE OF ADDITION MADE ON THE BASIS OF TD S CERTIFICATES, THE LD. COUNSEL SUBMITTED THAT THE AS SESSEE IS MANAGING THE FUNDS OF SUNDARAM MUTUAL FUND TRUST. FOR THE SERVICES RENDERED, ASSESSEE RECEIVES MANAGEMENT FE E FROM THE TRUST. THE FEE IS CALCULATED AT A SPECIFIC RATE ON THE QUANTUM OF ASSETS MANAGED AND BEFORE MAKING THE PAYMENT, THE T RUST DEDUCTS TAX AT SOURCE. TAX IS DEDUCTED AT SOURCE O N THE DAILY ACCRUALS OF FEE PAYABLE BY THE TRUST TO THE ASSESSE E. SUBSEQUENTLY, IT TRANSPIRED THAT EXCESS AMOUNT WAS CREDITED TO THE ASSESSEE. THE EXCESS AMOUNT WAS REVERSED BY THE ASSESSEE ON THE BASIS OF AUDIT. THEREFORE, THE DIFFERENCE O F RS. 15,82,291/- I.T.A. NO. 1774/MDS/2012 :- 11 - : IS THE AMOUNT REVERSED BY THE ASSESSEE AFTER AUDIT OF THE ACCOUNTS. THIS DIFFERENCE IN THE TDS HAS OCCURRED ON ACCOUNT OF THE AMOUNT REVERSED BY THE ASSESSEE, THEREFORE, TH E EXCESS TDS DEDUCTED BY THE TRUST HAS TO BE ADJUSTED. THE ASSE SSING OFFICER HAS ERRED IN COMING TO THE CONCLUSION THAT THE ASSE SSEE HAS UNDERSTATED THE INCOME RECEIVED FROM THE TRUST. IN SUPPORT OF HIS CONTENTIONS, THE LD. COUNSEL RELIED ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SUDHIR SEKHRI IN ITA NO. 438/2010 AND 460/2010 DECIDED ON 15-04-2010. 9. THE SEVENTH GROUND OF APPEAL RELATES TO THE TDS ON THE BROKERAGE PAID TO THE DISTRIBUTORS OF THE MUTUAL FU ND SCHEMES. THE LD. COUNSEL SUBMITTED THAT THE COMMISSION/BROKE RAGE PAID TO BROKERS FOR SALE OF VARIOUS MUTUAL FUNDS ARE COVERE D UNDER THE PROVISIONS OF SECTION 194H. SUCH COMMISSIONS PAID TO THE BROKERS HAS BEEN SPECIFICALLY EXCLUDED FROM TAX DED UCTION. THE ASSESSING OFFICER HAS ERRED IN APPLYING THE PROVISI ONS OF SECTION 194J RELATING TO MANAGERIAL AND PROFESSIONAL SERVIC ES. TO SUPPORT HIS CONTENTIONS, THE LD. COUNSEL RELIED ON THE JUDG MENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KOTAK SECURITIES REPORTED AS 3040 ITR 333 (BOM) . I.T.A. NO. 1774/MDS/2012 :- 12 - : 10. ON THE ISSUE OF RE-COMPUTATION OF BOOK PROFITS U/S. 115JB THE LD. COUNSEL SUBMITTED THAT THE SAME WILL NOT BE APPLICABLE IN THE PRESENT CASE AS THE NET PROFIT IS HIGHER THAN B OOK PROFITS COMPUTED UNDER MAT PROVISIONS. 11. ON THE OTHER HAND, SHRI T.N. BETGIRI, APPEARING ON BEHALF OF THE REVENUE STRONGLY SUPPORTED THE ORDER OF CIT(APP EALS) AND PRAYED FOR THE DISMISSAL OF THE APPEAL OF THE ASSES SEE. 12. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECI SIONS CITED BY THE LD. AR FOR THE ASSESSEE. OUR ISSUE-WISE FINDIN GS ON THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: I. GROUND NOS. 1 & 9 ARE GENERAL IN NATURE AND THER EFORE ARE NOT TAKEN UP FOR ADJUDICATION. II. GROUND NO.2 IS WITH REGARD TO DIS-ALLOWANCE U/S . 14A R.W.R. 8D; THE CONTENTIONS OF THE AR IS THAT THE ASSESSEE HAS NOT INCURRED ANY EXPENDITURE TO EARN DIVIDENDS AND HENCE THE AUT HORITIES I.T.A. NO. 1774/MDS/2012 :- 13 - : BELOW ARE UN-JUSTIFIED IN MAKING ADDITION UNDER THE PROVISIONS OF RULE 14A R.W.R. 8D. WE ARE OF THE CONSIDERED OPINI ON THAT IN VIEW OF THE ORDER OF THE TRIBUNAL IN THE CASE OF CHEMINVEST LTD., VS. ITO REPORTED AS 124 TTJ 577 (DEL) (SB) WHEREIN IT HAS BEEN HELD THAT IF THE EXPENDITURE IS INCURRED IN RELATIO N TO INCOME WHICH DOES NOT FORM PART OF TOTAL INCOME IT HAS TO SUFFER DIS- ALLOWANCE IRRESPECTIVE OF THE FACT WHETHER ANY INCO ME IS EARNED BY THE ASSESSEE OR NOT. SECTION 14A DOES NOT ENVIS AGE ANY SUCH EXCEPTION. THUS, IN VIEW OF THE OBSERVATIONS MADE IN THE SPECIAL BENCH OF THE TRIBUNAL, DIS-ALLOWANCE HAS TO BE MADE U/S. 14A R.W.R. 8D. IT IS AN ADMITTED FACT THAT TH E ASSESSEE HAS MADE INVESTMENTS. SOME OF THE INVESTMENTS MADE BY THE ASSESSEE ARE SHORT TERM. SINCE ASSESSEE IS PAYING CAPITAL GAINS TAX ON SHORT TERM INVESTMENTS, THE PROVISIONS OF RULE 8D WILL NOT APPLY ON THEM. THE ASSESSING OFFICER IS D IRECTED TO RE- COMPUTE DIS-ALLOWANCE U/S. 14A R.W.R. 8D AFTER EXC LUDING SHORT TERM INVESTMENTS. THIS GROUND OF APPEAL OF THE ASS ESSEE IS PARTLY ALLOWED IN THE AFORESAID TERMS. III. THE THIRD GROUND IN THE APPEAL RELATES TO DIS- ALLOWANCE U/S. 40(A)(IA). THE ASSESSEE IS INTO INVESTMENT BUSINES S. THE I.T.A. NO. 1774/MDS/2012 :- 14 - : ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH M/S. FU ND QUEST (FRANCE) ON 13-07-2007, TO PROVIDE INVESTMENT ADVIC E FOR THE INVESTMENTS TO BE CARRIED OUTSIDE INDIA. M/S. FUND QUEST HAS BEEN PROVIDING ADVISORY SERVICES. FOR THE SERVICES RENDERED, THE ASSESSEE PAID FEE IN ACCORDANCE WITH MUTUAL AGR EEMENT. IN THE COURSE OF PROVIDING ADVISORY SERVICES, M/S. FUN D QUEST IS PROVIDING CERTAIN DATA OF THE COMPANIES WHICH FACIL ITATES THE ASSESSEE TO MAKE INVESTMENT DECISIONS. THE INFORMA TION PROVIDED TO THE ASSESSEE BY FUND QUEST IN THE FORM OF DATABASE IS PUBLISHED INFORMATION WHICH IS AVAILABLE IN PUBL IC DOMAIN. M/S. FUND QUEST HAS MERELY COMPILED THE INFORMATION AND TRANSMITTED THE SAME TO ASSESSEE. THE AUTHORITIES BELOW TERMED THE PAYMENTS MADE BY THE ASSESSEE TO M/S. FU ND QUEST FOR THE SERVICES AND DATA PROVIDED AS ROYALTY. WE ARE OF THE CONSIDERED OPINION THAT SUCH PAYMENTS CANNOT BE TERMED AS ROYALTY AS DEFINED UNDER THE PROVISI ONS OF THE ACT. THE TERM ROYALTY HAS BEEN DEFINED IN EXPLAN ATION (2) TO SECTION-9, SUB-SECTION-1, CLAUSE-(VI) WHICH IS RE-P RODUCED HERE IN BELOW: I.T.A. NO. 1774/MDS/2012 :- 15 - : EXPLANATION 2. FOR THE PURPOSES OF THIS CLAUSE, 'ROYALTY' MEANS CONSIDERATION (INCLUDING ANY LUMP SUM CONSIDERATION BUT EXCLUDING ANY CONSIDERATION WHICH WOULD BE THE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD 'CAPITAL GAINS') FOR (I) THE TRANSFER OF ALL OR ANY RIGHTS (INCLUDING TH E GRANTING OF A LICENCE) IN RESPECT OF A PATENT, INVENTION, MODEL, DESIGN, SECRET FORMULA OR PROCESS OR TRADE MARK OR SIMILAR PROPERTY ; (II) THE IMPARTING OF ANY INFORMATION CONCERNI NG THE WORKING OF, OR THE USE OF, A PATENT, INVENTION, MODEL, DESIGN, SEC RET FORMULA OR PROCESS OR TRADE MARK OR SIMILAR PROPERTY ; (III) THE USE OF ANY PATENT, INVENTION, MODEL, DESIGN, SECRET FORMULA OR PROCESS OR TRADE MARK OR SIMILAR PROPERTY ; (IV) THE IMPARTING OF ANY INFORMATION CONCERNING TECHNICAL, INDUSTRIAL, COMMERCIAL OR SCIENTIFIC KNOWLEDGE, EXP ERIENCE OR SKILL ; [(IVA) THE USE OR RIGHT TO USE ANY INDUSTRIAL , COMMERCIAL OR SCIENTIFIC EQUIPMENT BUT NOT INCLUDING THE AMOUNTS REFERRED TO IN SECTION 44BB;] (V) THE TRANSFER OF ALL OR ANY RIGHTS (INCLUDING THE GRANTING OF A LICENCE) IN RESPECT OF ANY COPYRIGHT, LITERARY, ART ISTIC OR SCIENTIFIC WORK INCLUDING FILMS OR VIDEO TAPES FOR USE IN CONN ECTION WITH TELEVISION OR TAPES FOR USE IN CONNECTION WITH RADI O BROADCASTING, BUT NOT INCLUDING CONSIDERATION FOR T HE SALE, DISTRIBUTION OR EXHIBITION OF CINEMATOGRAPHIC FILMS ; OR (VI) THE RENDERING OF ANY SERVICES IN CONNECTION WITH THE ACTIVITIES REFERRED TO IN SUB-CLAUSES (I) TO [(IV), (IVA) AND] (V). I.T.A. NO. 1774/MDS/2012 :- 16 - : THUS, A PERUSAL OF THE TERM OF ROYALTY AS DEFINED IN THE ACT SHOWS THAT IT DOES NOT INCLUDE ANY INFORMATION PROV IDED IN THE COURSE OF ADVISORY SERVICES. WE DO NOT AGREE WITH THE FINDINGS OF THE CIT(APPEALS) ON THE ISSUE. SINCE, PAYMENTS MAD E TO M/S. FUND QUEST ARE NOT IN THE NATURE OF ROYALTY AND T HE SERVICES WERE RENDERED ABROAD, NO PART OF INCOME HAD ACCRUED OR ARISEN IN INDIA. THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE ON THE PAYMENTS SO MADE. THE FINDINGS OF THE CIT(APPEALS) ON THIS ISSUE ARE SET ASIDE AND THIS GROUND OF APPEAL OF TH E ASSESSEE IS ALLOWED. IV. THE FOURTH GROUND OF APPEAL OF THE ASSESSEE REL ATES TO REPAIRS OF LEASE-HOLD PREMISES. THE ASSESSEE HAS PLACED ON RE CORD AT PAGE NO. 42 OF THE PAPER BOOK, THE NATURE OF WORK C ARRIED OUT BY THE ASSESSEE IN THE LEASED OFFICE PREMISES. THE AS SESSEE HAS CLAIMED THE EXPENDITURE ON CIVIL WORK WHICH INCLUDE S DEMOLITION, PAINTING, FLOORING AND PARTITION ETC., AMOUNTING TO RS. 2,06,61,216/- AS REVENUE EXPENDITURE. THE AUTHORIT IES BELOW HAVE HELD THE SAME TO BE CAPITAL EXPENDITURE. THE ASSESSEE HAS TAKEN OFFICE BUILDING ON LEASE FOR THE PERIOD OF TH REE YEARS WITH AN OPTION TO EXTEND WITH THE CONSENT OF BOTH PARTIES. AN EXPLANATION I.T.A. NO. 1774/MDS/2012 :- 17 - : 1 TO SECTION 32(1) CLEARLY SPELLS OUT THAT WHERE TH E BUSINESS OR PROVISION OF THE ASSESSEE IS CARRIED ON IN A BUILDI NG NOT OWNED BY HIM, IN RESPECT OF WHICH THE ASSESSEE HOLDS A LEASE OR OTHER RIGHTS OF OCCUPANCY, ANY CAPITAL EXPENDITURE IS INCURRED B Y THE ASSESSEE FOR THE PURPOSE OF THE BUSINESS OR PROFESSION ON TH E CONSTRUCTION OF ANY STRUCTURE OR DOING OF ANY WORK IN OR IN RELA TION TO AND BY WAY OF RENOVATION OR EXTENSION OR IMPROVEMENT TO TH E BUILDING, THEN THE PROVISIONS OF THIS CLAUSE SHALL APPLY AS I F THE SAID STRUCTURE OR WORK IS BUILDING OWNED BY THE ASSESSEE . HOWEVER, THE AFORESAID PROVISIONS ARE APPLICABLE WHERE NEW A SSET HAS COME INTO EXISTENCE. THE ASSESSEE IN SUPPORT OF HI S CONTENTIONS HAS RELIED ON THE ORDER OF THE CO-ORDINATE BENCH O F THE TRIBUNAL IN THE CASE OF M/S. SUNDARAM BNP PARIBAS ASSET MANAGEMENT COMPANY LTD., VS. ACIT (SUPRA), THE TRIBUNAL IN THE AFORESAID ORDER HAS HELD AS UNDER: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE BREAK UP OF THE EXPENSES WHICH HAVE BEEN DISALLOWED CLEAR LY SHOWS THAT THE EXPENDITURES ARE ON THE INTERIOR DECORATIONS AN D CREATION OF THE OFFICE ATMOSPHERE. THE EXPENDITURE HAS NOT RESULTED IN ANY BUILDING COMING INTO EXISTENCE NOR HAS THE EXISTING BUILDING BEEN MODIFIED OR THE STRUCTURE ALTERED. AS THE EXISTING BUILDING HAS NOT BEEN ALTERED AND THERE IS NO CHANGE TO ITS STRUCTURE AS A RESULT OF THE EXPENDITURE INCURRED BY THE ASSESSEE, IT CANNOT BE SAID THAT TH E EXPENDITURE I.T.A. NO. 1774/MDS/2012 :- 18 - : INCURRED BY THE ASSESSEE IS IN THE CAPITAL FIELD. F URTHER A PERUSAL OF THE EXPENDITURE CLEARLY SHOWS THAT IT IS IN THE REV ENUE FIELD. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE EXPENDITU RE ON THE REPAIRS AND MAINTENANCE IN THE FORM OF ELECTRICAL FITTINGS, ELECTRIFICATION, CABINET, WORK STATION, PARTITION, CUPBOARD, STAND E TC. ARE LIABLE TO BE TREATED AS A REVENUE EXPENDITURE. IN THE CIRCUMSTAN CES, THE ORDERS OF THE LEARNED CIT(A) AND THE ASSESSING OFFICER ARE RE VERSED ON THIS ISSUE AND THE ASSESSING OFFICER IS DIRECTED TO GRAN T THE ASSESSEE THE CLAIM OF REVENUE EXPENDITURE IN REGARD TO THE SAID EXPENDITURE. CONSEQUENTLY, THE DEPRECIATION AS ALLOWED BY THE AS SESSING OFFICER ON THE SAID EXPENDITURE WHICH HAS BEEN CAPITALIZED WOULD STAND REVERSED. WHETHER THE EXPENDITURE INCURRED ON RENOVATION OF A BUILDING IS CAPITAL OR REVENUE, IS A QUESTION OF FA CT. THE SAME HAS TO BE DECIDED ON THE FACTS OF EACH CASE. WE FIND T HAT THE FACTS OF THE CASE OF THE ASSESSEE ARE SIMILAR TO THE ONE ADJ UDICATED BY THE TRIBUNAL MENTIONED ABOVE. THE CIVIL WORK RELATES T O THE INTERIOR DECORATION AND CREATION OF THE OFFICE ATMOSPHERE . RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED AN D THE EXPENDITURE INCURRED BY THE ASSESSEE IN MODIFYING T HE INTERIORS OF A BUILDING INTO OFFICE ARE HELD TO BE REVENUE IN NA TURE. V. THE FIFTH GROUND OF APPEAL OF THE ASSESSEE RELAT ES TO THE ISSUE OF DEPRECIATION ON UPS: THE ASSESSEE HAS CLAIMED DEPRE CIATION ON I.T.A. NO. 1774/MDS/2012 :- 19 - : UPS @ 60% TREATING THE SAME AS PART OF COMPUTER. O N THE OTHER HAND, THE ASSESSING OFFICER HAS CONSIDERED THE UPS AT PAR WITH PLANT & MACHINERY AND RESTRICTED THE DEPRECIATION T O 15%. IT HAS BEEN REPEATEDLY HELD IN VARIOUS DECISIONS OF THE TR IBUNAL THAT DEPRECIATION @ 60% HAS TO BE PROVIDED ON UPS TREATI NG IT TO BE THE PART OF COMPUTER. THIS ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF HAWORTH (I) P. LTD., (SUPRA) AND MACAWBER ENGINEERING SYSTEMS (INDIA) P. LTD., (SUPRA) WHEREIN IT HAS BEEN HELD THAT UPS IS AN INTEGRAL PART OF THE COMPUTER. THIS VIEW HAS BEEN CONSISTENTLY FOLLOWED BY THE TRIBUNAL IN VARIO US OTHER APPEALS. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED AND THE ASSESSEE IS ENTITLED TO CLAIM DEPRE CIATION @ 60% ON UPS. VI. THE SIXTH GROUND OF APPEAL OF THE ASSESSEE REL ATES TO INVESTMENT MANAGEMENT FEE. THE CASE OF THE ASSESSEE IS THAT T HE DIFFERENCE BETWEEN THE TDS AND ACTUAL TAX HAS OCCUR RED AS THE EXCESS AMOUNT WAS INVOICED TO M/S. SUNDARAM MUTUAL FUND TRUST (HEREIN AFTER REFERRED TO AS THE TRUST) FOR WHOM THE ASSESSEE IS MANAGING THE FUNDS. AFTER AUDIT OF THE ACCOUNTS, THE EXCESS AMOUNT INVOICED WAS REVERSED BY THE ASSESSEE . THE TRUST I.T.A. NO. 1774/MDS/2012 :- 20 - : MADE PAYMENTS ON DAILY ACCRUAL BASIS TO THE ASSESSE E AFTER DEDUCTION OF TAX. SINCE EXCESS AMOUNT WAS INVOICED TO THE TRUST, TAX WAS DEDUCED ON THE SAID EXCESS AMOUNT AT THE TI ME OF PAYMENTS, WHEREAS THE TAX LIABILITY OF THE ASSESSEE IS ON THE NET AMOUNT AFTER ADJUSTMENT. THE CIT(APPEALS) HAS HELD THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTI NG. AS AND WHEN IT RAISES AN INVOICE, THE SAME WAS ACCEPTED BY THE TRUST. THUS, THE INCOME STANDS ACCRUED TO THE ASSESSEE IN THE YEAR IN WHICH THE SAID INVOICE IS RAISED AND ACKNOWLEDGED I N A PARTICULAR ASSESSMENT YEAR. THE INCOME RECEIVED AGAINST THOSE INVOICES HAVE TO BE ASSESSED IN THAT PARTICULAR ASSESSMENT Y EAR. ANY SUBSEQUENT RE-CONCILIATION RESULTING IN REVISION OR REVERSAL ENTRY IN THE SUBSEQUENT ASSESSMENT YEAR WILL NOT HAVE BEARIN G ON THE INCOME ACCRUED IN THE PREVIOUS YEAR. IT IS A WELL SETTLED LAW THAT THE ASSESSEE SHOULD N OT BE TAXED TWICE FOR THE SAME INCOME OR TAXED FOR THE INCOME W HICH HAS NOT ACCRUED TO HIM. IT IS EVIDENT FROM RECORDS AND THE IMPUGNED ORDER THAT CERTAIN REVERSAL ENTRIES WERE MADE TO ADJUST T HE EXCESS PAYMENTS. IT IS ALSO AN ADMITTED FACT THAT TAX HAS BEEN PAID ON SUCH EXCESS PAYMENTS. THE INCOME WHICH HAS NOT ACC RUED TO THE I.T.A. NO. 1774/MDS/2012 :- 21 - : ASSESSEE IS NOT LIABLE TO BE TAXED. IN THE INSTANT CASE, THE ASSESSEE HAD RAISED INVOICES TO THE TRUST FOR RS. 8 5,83,43,545/- (INCLUDING SERVICE TAX). WHEREAS THE AMOUNT ACTUAL LY ACCOUNTED IN THE BOOKS WAS RS. 85,67,61,254/- (INCLUDING SERV ICE TAX). THERE WAS NET DIFFERENT OF RS. 15,82,291/- AFTER AD JUSTMENTS WHICH ASSESSING OFFICER BROUGHT TO TAX. THE ERROR WAS DI SCOVERED DURING AUDIT WHICH WAS RECTIFIED. BY THE TIME THE EXCESS AMOUNT WAS REVERSED, FORM 16A WAS ISSUED. HOWEVER, THE TR UST HAS ISSUED CONFIRMATION LETTER REGARDING EXCESS ACCRUAL . IT IS APPARENT FROM RECORDS THAT TAX WAS DEDUCTED ON EXCESS INVOIC ING WHICH WAS REVERSED. IN OUR CONSIDERED OPINION, THE ADDIT ION MADE IS UNJUSTIFIED. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF SUDHIR SEKHRI (SUPRA) WHEREIN SIMILAR VIEW WAS TAKEN BY THE HONB LE HIGH COURT IN THE FACTS OF THAT CASE. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. VII. THE SEVENTH GROUND OF APPEAL RELATES TO PAYMEN TS MADE TO MUTUAL FUND DISTRIBUTORS AMOUNTING TO RS. 16,41,14, 706/- DIS- ALLOWED U/S. 40(A)(IA). THE ASSESSEE HAD NOT DEDUC TED TAX AT SOURCE ON THE PAYMENT OF THE BROKERAGE/COMMISSION P AID TO THE I.T.A. NO. 1774/MDS/2012 :- 22 - : MUTUAL FUND DISTRIBUTORS ON THE GROUND THAT COMMISS ION AND BROKERAGE DOES NOT INCLUDE ANY PAYMENT MADE DIRECTL Y OR INDIRECTLY ON SECURITIES. THE REVENUE HAS TERMED THE PAYMENTS MADE TO THE BROKERS AS FEES FOR PROFESSIONAL & TECHNICAL SERVIC ES AND HELD THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX UNDER TH E PROVISIONS OF SECTION 194J. THE PROVISIONS REGARDING DEDUCTION OF TAX AT SOURCE ON COMMISSION AND BROKERAGE ARE CONTAINED IN SECTION 1 94H OF THE ACT. THE RELEVANT EXTRACT OF THE SECTION IS REPROD UCED HEREIN BELOW: 194H. ANY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDI VIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING, ON OR AFTER THE 1ST DAY OF JUNE, 2001, TO A RESIDENT, ANY INCOME BY WAY OF COM MISSION (NOT BEING INSURANCE COMMISSION REFERRED TO IN SECTION 1 94D) OR BROKERAGE, SHALL, AT THE TIME OF CREDIT OF SUCH INC OME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT OF SUCH INCO ME IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE , WHICHEVER IS EARLIER, DEDUCT INCOME-TAX THEREON AT THE RATE OF [ TEN] PER CENT : THE TERMS COMMISSION AND BROKERAGE AND SECURITIES A RE DEFINED IN EXPLANATION TO SECTION 194H. THE SAME A RE EXTRACTED HEREIN UNDER: I.T.A. NO. 1774/MDS/2012 :- 23 - : EXPLANATION I) COMMISSION OR BROKERAGE INCLUDES ANY PAYMENT RECE IVED OR RECEIVABLE, DIRECTLY OR INDIRECTLY, BY A PERSON ACT ING ON BEHALF OF ANOTHER PERSON FOR SERVICES RENDERED (NOT BEING PRO FESSIONAL SERVICES) OR FOR ANY SERVICES IN THE COURSE OF BUYI NG OR SELLING OF GOODS OR IN RELATION TO ANY TRANSACTION RELATING TO ANY ASSET, VALUABLE ARTICLE OR THING, NOT BEING SECURITIES; II) XXXXXXXXXXXXXXXXXXXX (III) THE EXPRESSION 'SECURITIES' SHALL HAVE TH E MEANING ASSIGNED TO IT IN CLAUSE (H) OF SECTION 2 OF THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 (42 OF 1956) ; (IV) WHERE ANY INCOME IS CREDITED TO ANY ACCOU NT, WHETHER CALLED 'SUSPENSE ACCOUNT' OR BY ANY OTHER NAME, IN THE BOO KS OF ACCOUNT OF THE PERSON LIABLE TO PAY SUCH INCOME, SUCH CREDI TING SHALL BE DEEMED TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT O F THE PAYEE AND THE PROVISIONS OF THIS SECTION SHALL APPLY ACCO RDINGLY.] SECTION 2(H) OF THE SECURITIES CONTRACTS (REGULATIO N) ACT, 1956 DEFINES SECURITIES AS : 2(H) SECURITIES INCLUDE (I) SHARES, SCRIPS, STOCKS, BONDS, DEBENTURES, DEBE NTURE STOCK OR OTHER MARKETABLE SECURITIES OF A LIKE NATURE IN OR OF ANY INCORPORATED COMPANY OR OTHER BODY CORPORATE; (IA) DERIVATIVE; (IB) UNITS OR ANY OTHER INSTRUMENT ISSUED BY ANY CO LLECTIVE INVESTMENT SCHEME TO THE INVESTORS IN SUCH SCHEMES; I.T.A. NO. 1774/MDS/2012 :- 24 - : (IC) SECURITY RECEIPT AS DEFINED IN CLAUSE (ZG) OF SECTION 2 OF THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSE TS AND ENFORCEMENT OF SECURITY INTEREST ACT,2002; (ID) UNITS OR ANY OTHER SUCH INSTRUMENT ISSUED TO T HE INVESTORS UNDER ANY MUTUAL FUND SCHEME; (IE) XXXXXX FROM THE PERUSAL OF AFORESAID PROVISIONS OF SECTION 194H AND THE DEFINITION OF SECURITIES AS DEFINED UNDER SECURIT IES CONTRACT REGULATION ACT, IT IS CLEARLY EVIDENT THAT SECURITI ES INCLUDE MUTUAL FUNDS AND THE PROVISIONS OF SECTION 194H EXCLUDES C OMMISSION OR BROKERAGE PAID ON SECURITIES. THE AUTHORITIES BELOW HAVE HELD THAT THE ASSESSEE SHOULD HAVE DEDUCTED TAX ON COMMISSION/BROKERAGE U/S. 194J OF THE ACT AS THE SERVICES RENDERED BY THE BROKERS ARE PROFESS IONAL AND/OR TECHNICAL SERVICES. PROFESSIONAL SERVICES ARE DE FINED IN EXPLANATION(A) TO SECTION 194J AS UNDER: EXPLANATION. (A) 'PROFESSIONAL SERVICES' MEANS SERVICES RENDERE D BY A PERSON IN THE COURSE OF CARRYING ON LEGAL, MEDICAL, ENGINEERI NG OR ARCHITECTURAL PROFESSION OR THE PROFESSION OF ACCOU NTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR ADV ERTISING OR SUCH OTHER PROFESSION AS IS NOTIFIED BY THE BOARD FOR TH E PURPOSES OF SECTION 44AA OR OF THIS SECTION; I.T.A. NO. 1774/MDS/2012 :- 25 - : A PERUSAL OF THE ABOVE DEFINITION MAKES IT ABUNDANT LY CLEAR THAT SERVICES RENDERED BY MUTUAL FUND BROKERS DO NOT FAL L WITHIN THE TERM PROFESSIONAL SERVICES. THE SERVICES OF MUTU AL FUND BROKERS CANNOT BE TERMED AS TECHNICAL SERVICES AS W ELL, AS THE BROKERS DO NOT REQUIRE ANY SPECIAL QUALIFICATION IN THE FIELD OF LAW, ENGINEERING, ACCOUNTANCY OR TECHNICAL CONSULTANCY. EVEN AN ORDINARY GRADUATE FROM HUMANITIES GROUP CAN BE A BR OKER. THE BROKERS DO NOT PROVIDE ANY TECHNICAL KNOW-HOW EITHE R, THUS SERVICES RENDERED BY THEM CANNOT BE TERMED AS TECHN ICAL SERVICES. WE DO NOT CONCUR WITH THE FINDINGS OF CIT(APPEALS) ON THE ISSUE FOR THE AFORESAID REASONS. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. VIII. THE NEXT GROUND OF APPEAL RELATES TO RE-COMPU TATION OF BOOKS PROFITS U/S. 115JB. THE LD. COUNSEL FOR THE ASSESS EE HAS STATED THAT SINCE THE NET PROFIT UNDER NORMAL COMPUTATION IS HIGHER THAN BOOK PROFITS COMPUTED U/S. 115JB, THEREFORE, THIS G ROUND OF APPEAL HAS BECOME ACADEMIC. THE LD. DR HAS NOT CON TROVERTED THE STATEMENT MADE BY THE COUNSEL OF THE ASSESSEE. THIS GROUND OF APPEAL IS DISMISSED ACCORDINGLY. I.T.A. NO. 1774/MDS/2012 :- 26 - : IX. THE LAST EFFECTIVE GROUND OF APPEAL RELATES TO DELETING OF INTEREST U/S. 234B & 234D OF THE ACT. SINCE LEVY OF INTERES T U/S. U/S. 234B & 234D IS CONSEQUENTIAL IN NATURE, THIS GROUND OF A PPEAL OF THE ASSESSEE IS DISMISSED. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON FRIDAY, THE 19 TH JULY, 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (VIKAS AWASTHY) JUDICIAL MEMBER DATED: 19 TH JULY, 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR