DCIT, New Delhi V. M/s. OPG Securities Pvt. Ltd., New Delhi

ITA 2217/DEL/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4094 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 16-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 15-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. NO.2217/DEL/2015 A.Y. : 2010-11 DCIT, CIRCLE 19(1), ROOM NO. 221, CR BUILDING, IP ESTATE, NEW DELHI VS. M/S OPG SECURITIES PVT. LTD. OPG HOUSE, 4/10, ASAF ALI ROAD, NEW DELHI 2 (PAN:AAAC01081C) (APPELLANT) (RESPONDENT) DEPARTMENT BY : NONE ASSESSEE BY : SH. R.K. GUPTA, CA DATE OF HEARING : 16-08-2016 DATE OF ORDER : 16-08-2016 ORDER PER H.S. SIDHU, JM REVENUE HAS FILED THE APPEAL AGAINST THE ORDER DA TED 19.1.2015 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)--7, NEW DELHI PERTAINING TO ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUND: - 1. IN THE FACTS AND UNDER THE CIRCUMSTANCES OF LD. CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 39,83,538 /- MADE BY AO IN RESPECT OF FEE PAID TO SEBI AS THE ISSUE I S SUB JUDICE BEFORE THE HONBLE SUPREME COURT. 2. IN THE FACTS AND UNDER THE CIRCUMSTANCES, THE LD. C IT(A) HAS ERRED IN DIRECTING THE AO TO RECOMPUTED AND ALLOW L ONG TERM ITA NO.2217/DEL/2015 2 CAPITAL LOSS AFTER CONSIDERING INDEXATION, AS THE S AME ARE UNLISTED SHARES. 3. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND / OR DELETE OR AMEND ANY OF THE GROUN DS OF APPEAL. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED, THEREFORE, THE SAME ARE NOT REPEATED HERE FOR THE S AKE OF CONVENIENCE. 3. NOTICE OF HEARING WAS ISSUED TO BOTH THE PARTI ES AND IN RESPONSE TO THE SAME ONLY THE LD. A.R. OF THE ASSESSEE ATTENDED TH E HEARING, BUT NONE APPEARED ON BEHALF OF THE DEPARTMENT NOR ANY APPLICATION FO R ADJOURNMENT HAS BEEN FILED BY THE DEPARTMENT. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM DECIDING THE APPEAL EXPARTE QUA REVENUE, AFTER H EARING THE LD. AR AND PERUSING THE RECORDS. 4. LD. A.R. OF THE ASSESSEE RELIED UPON THE ORDER O F THE LD. CIT(A) AND HAS STATED THAT LD. CIT(A) HAS PASSED A WELL REASONED O RDER WHICH DOES NOT NEED ANY INTERFERENCE. FURTHER, LD. A.R. OF THE ASSESSE E STATED THAT LD. CIT(A) HAS DECIDED THE ISSUE BY RESPECTFULLY FOLLOWING THE HON BLE DELHI HIGH COURT DECISION IN THE CASE OF CIT VS. BLB LTD. PASSED IN ITA 1878/2010. THEREFORE, HE STATED THAT PRESENT APPEAL MAY BE DISMISSED ACCO RDINGLY. 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. I FIND THAT LD. CIT(A) HAS ELABORATELY ADJUDICATED THE ISSUE VIDE PARA NO. 6 TO 7 VIDE HIS ORDER DATED 19.1.2015. THE RELEVANT PARAS NO. 6 TO 7 ARE REPRODUCED AS UNDER:- 6. GROUND NO. 2 IS IN RESPECT OF DISALLOWANCE OF R S. 39,83,538/-0 WHICH WAS FEES PAID BY THE APPELLANT T O SEBI. 6.1 THE APPELLANT IS MEMBER OF NSE & BSE AND IS A R EGISTERED STOCK BROKEN DEALING IN SHARES AND SECURITIES. THE APPELLANT IS ITA NO.2217/DEL/2015 3 REQUIRED TO PAY FEES TO SEBI EVERY YEAR IN TERMS OF THE PROVISIONS OF THE SEBI ACT AND REGULATIONS FRAMED. SEBI HAD R AISED A DEMAND OF RS.39,83,538/- TOWARDS REGISTRATION FEES FOR THE PERIOD 01.10.2006 TO 30.09.2007. THE APPELLANT CONTESTED T HE DEMAND BEFORE THE SECURITIES APPELLATE TRIBUNAL WHO DISMIS SED THE APPEAL AND HELD THE DEMAND TO BE IN ORDER. 6.2. THE APPELLANT HAD TO PAY THE ENTIRE FEE TO SE BI DURING THE RELEVANT ASSESSMENT YEAR. SEBI RAISED DEMAND FOR IN TEREST ON THIS FEE WHICH WAS STAYED BY THE HON'BLE SUPREME COURT. 6.3. THE AO NOTED THAT THE APPELLANT HAD CLAIMED RS .53,63,358/- IN THE P&L ACCOUNT AS FEES PAID TO SEBI. OUT OF THIS A MOUNT RS.38,83,538/- PERTAINED TO EARLIER YEARS AND WAS P AID DURING THIS YEAR. THE AO DISALLOWED THIS AMOUNT STATING THAT TH IS WAS PRIOR PERIOD EXPENSES . 6. 4. THE APPELLANT STATED THAT THE DEMAND WAS QUA NTIFIED ONLY AFTER RECEIPT OF ORDER FORM THE SECURITIES APPELLAT E TRIBUNAL AND WAS THEREFORE PAID DURING THE RELEVANT ASSESSMENT Y EAR AND SHOULD BE ALLOWED U/S 43B. THE APPELLANT HAS QUOTED THE DE CISION OF THE HONBLE DELHI COURT IN THE CASE OF CIT VS. BLB LTD REPORTED IN ITA NO. 1878/2010. 6.5. I HAVE PERUSED THE ORDER OF THE HON'BLE DELHI HIGH COURT. THE COURT HAD OBSERVED AS UNDER: '10. AGGRIEVED BY THIS ORDER, THE REVENUE/DEPARTME NT FILED AN APPEAL BEFORE ITAT WHO RELIED ON THE ORDER PASSE D BY ITAT MUMBAI BENCH IN CASE OF ITO VS. SURESH CHAND 100 ITD 435 AND ANOTHER IN CASE OF K HOLDING CO. (P) LTD VS. DCIT 32 SOT 586 WHEREIN IT HAD BEE N ITA NO.2217/DEL/2015 4 HELD THAT SEBI TURNOVER FEE, BEING A STATUTORY LIAB ILITY WAS ALLOWABLE U/S 43B OF THE ACT. ACCORDINGLY, IN T HE PRESENT CASE ITAT HELD THAT SAME AS PAYMENT AS FEE IS FILING U/S 43B IN THE YEAR UNDER CONSIDERATION AS PAYMENT WAS MADE DURING THE YEAR. 11. THE ITA T HAS COME TO THE CONCLUSION ON THE FOLLOWING BASIS:- (I) THE SEBI IS A. NODAL AGENCY FOR REGULATING THE STOCK MARKET, BROKERS, SUB-BROKERS, AND OTHER BROKE RS AND INTERMEDIATE WHO HAVE REGISTERED THEMSELVES WIT H THE SEBL (II) THE SEBI ACT 1992, EMPOWERS SEBI TO LEVY 'FEE, ' FOR REGISTRATION FOR REGISTERING BROKERS/SUB-BROKE RS CALLED AS SEBI REGISTRATION 'FEE': - (III) THE SEBI REGULATIONS ALSO PRESCRIBE THE BASIS FOR CHARGING OF SEBI REGISTRATION 'FEE' WHICH IS RELATA BLE TO THE TURNOVER OF THE ASSESSEE. (IV) THE BROKEN HOWEVER WERE REPRESENTING TO THE BOARD THAT THE 'FEE' WAS ARBITRARY AND EXCESSIVE. (V) THE BROKERS FORUM WENT TO THE SUPREME COURT WHO VIDE ITS JUDGMENT DATED 07.02.2011 UPHELD THE REGULATIONS OF SEBI AND HELD THAT THE 'FEE' LEVIED BY SEBI WAS REASONABLE AND VALID. (VI) IN THE MEANTIME, THE SEBI CAME OUT WITH ONE TI ME SETTLEMENT 'FEES' ALONG WITH INTEREST FOR NON-LATE PAYMENT OF SEBI REGISTRATION 'FEE'. THERE WAS A CAS E ITA NO.2217/DEL/2015 5 OF LALIT KUMAR MARODIA VS. UOI & ORS. 2005 59 SCL 474 (CAL) WHEREIN AN INTERIM ORDER WAS PASSED BY TH E HIGH COURT ON 20.05.2004, ~HERE AFTER WAS PAYMENT WAS MADE BY THE APPELLANT. ' .. 23. ACCORDING TO THE PERCEPTION OF THE INCOME TAX DEPARTMENT CONTAINED IN CIRCULAR NO. 528 DATED 16. 12. 1988, THE DISALLOWANCE WAS TO COVER ANY AMOUNT PAYA BLE TO ANY STATUTORY AUTHORITY INCLUDING LOCAL AUTHORITY A ND COULD BE ALLOWED ONLY IN THE YEAR IN WHICH SUCH AN AMOUNT IS PAID IN THAT VIEW, THEREFORE, THE AMENDMENT WAS MADE AND IT WAS CLARIFIED THAT SUCH AN AMOUNT WOULD ALSO BE ALLOWAB LE ONLY ON ACTUAL PAYMENT IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH LIABILITY TO PAY SUCH SUM WAS INCURRED IN VIEW THER EOF, THE AMENDMENT WAS MADE AND IT WAS CLARIFIED THAT SUCH A N AMOUNT WOULD ALSO BE ALLOWABLE ONLY ON ACTUAL PAYME NT IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH LIABILIT Y TO PAY SUCH SUM WAS INCURRED' 6.6. I FIND THAT IN THIS CASE THE FACTS ARE SIMIL AR. THE APPELLANT WAS REQUIRED TO PAY A FEE TO SEBI. THE APPELLANT FILED AN APPEAL BEFORE THE SECURITIES APPELLATE TRIBUNAL WHO PASSED THE OR DER DISMISSING THE APPEAL AND THEREAFTER THE APPELLANT MADE THE PA YMENT. THE AMOUNT OF RS.39,83,538/- WAS THEREFORE PAID DURING THE YEAR. IN VIEW OF THE DISCUSSION ABOVE, IN VIEW OF THE JUDGEM ENT OF THE HONBLE HIGH COURT OF DELHI THE AMOUNT OF RS.39,83,5 38/- IS ALLOWED AS A DEDUCTION TO THE APPELLANT. THE ADDITI ON IS THUS DELETED. THE GROUND OF APPEAL IS RULED IN FAVOUR OF THE APPELLANT. ITA NO.2217/DEL/2015 6 7. GROUND NO.3 IS IN RESPECT OF THE FACT THAT THE A O DETERMINED LONG TERM CAPITAL LOSS AT RS. 75 LACS BUT DID NOT A LLOW INDEXATION OF COST. THE APPELLANT HAS STATED THAT THE LOSS AFTER INDEXATION WORKS OUT TO RS.1,19,10,163/-. THE AO IS DIRECTED TO RE-C OMPUTE AND ALLOW THE LOSS AFTER CONSIDERING INDEXATION. THE G ROUND OF APPEAL IS RULED IN FAVOUR OF THE APPELLANT. 5.1 AFTER PERUSING THE AFORESAID FINDING OF THE LD. CIT(A), I AM OF THE VIEW THAT LD. CIT(A) HAS RIGHTLY RESPECTFULLY FOLLOWED THE HONBLE HIGH COURT OF DELHI DECISION IN THE CASE OF CIT VS. BLB LTD. REPO RTED IN ITA NO. 1878/2010 BY OBSERVING THAT THE ASSESSEE WAS REQUIRED TO PAY A FEE TO SEBI. THE ASSESSEE FILED AN APPEAL BEFORE THE SECURITIES APPELLATE TRI BUNAL WHO PASSED THE ORDER DISMISSING THE APPEAL AND THEREAFTER THE ASSESSEE M ADE THE PAYMENT. THE AMOUNT OF RS.39,83,538/- WAS THEREFORE PAID DURING THE YEAR. IN VIEW OF THE DISCUSSION ABOVE AND IN VIEW OF THE JUDGEMENT OF T HE HONBLE HIGH COURT OF DELHI THE AMOUNT OF RS.39,83,538/- WAS RIGHTLY ALL OWED AS A DEDUCTION TO THE ASSESSEE AND THUS ADDITION WAS DELETED AND GROUND O F APPEAL WAS RULED IN FAVOUR OF THE ASSESSEE. IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS PASSED A WELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE ON MY PART, HENCE, I UPHOLD THE SAME AND REJECT TH E GROUND NO. 1 OF APPEAL RAISED BY THE REVENUE. 5.2 WITH REGARD TO GROUND NO. 2 RELATING TO RE-COMP UTING AND ALLOWING LONG TERM CAPITAL LOSS AFTER CONSIDERING INDEXATION IS CONCERNED, I FIND THAT LD. CIT(A) HAS RIGHTLY OBSERVED THAT THE AO DETERMINED LONG TERM CAPITAL LOSS AT RS. 75 LACS BUT DID NOT ALLOW INDEXATION OF COST. H OWEVER, THE ASSESSEE HAS STATED THAT THE LOSS AFTER INDEXATION WORKS OUT TO RS.1,19,10,163/-. THEREFORE, THE LD. CIT(A) WAS RIGHT IN DIRECTING THE AO TO RE -COMPUTE AND ALLOW THE LOSS AFTER CONSIDERING INDEXATION. IN VIEW OF THE ABO VE, I AM OF THE CONSIDERED VIEW THAT LD. CIT(A) HAS PASSED A WELL REASONED ORD ER WHICH DOES NOT NEED ANY ITA NO.2217/DEL/2015 7 INTERFERENCE ON MY PART, HENCE, I UPHOLD THE SAME AND REJECT THE GROUND NO. 2 OF APPEAL RAISED BY THE REVENUE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/08/2016. SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 16/08/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY OR DER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES