VIOLET ARCH SECURITIES P. LTD ( FORMERLY KNOWN AS ALCHEMY SHARE & STOCK BROKERS P.LTD), MUMBAI V. ASST CIT RG 4(1), MUMBAI

ITA 3358/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3601 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: NATASHA MANGAT
• Keywords: Question of law

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI . . , / BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND . , SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER . / ITA NO.3358/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 M/S. VIOLET ARCH SECURITIES PRIVATE LIMITED, (FORMERLY KNOWN AS ALCHEMY SHARE & STOCK BROKERS PVT. LTD.) 804, 8 TH FLOOR, TOWER NO.1, ONE INDIA BULLS CENTRE, SENAPATI BAPAT MARG, ELPHINSTONE ROAD, MUMBAI 400 013. ! ! ! ! / VS. THE ASSTT. COMMISSIONER OF INCOME TAX, RANGE 4(1), AAYKAR BHAVAN, MK ROAD, MUMBAI - 400 020 # ./ $% ./ PAN/GIR NO. : AADCA0343C ( #& / APPELLANT ) .. ( '(#& / RESPONDENT ) #& ) / APPELLANT BY: MS. NATASHA MANGAT '(#& * ) / RESPONDENT BY : SHRI O.P.MEENA ! * + / DATE OF HEARING : 06/06/2013 ,-' * + / DATE OF PRONOUNCEMENT : 06/06/2013 . / O R D E R PER I.P.BANSAL, J.M: THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER DATED 01/02/2012 OF LD. CIT(A)- 8 MUMBAI FOR ASSE SSMENT YEAR 2008-09. THE GROUNDS OF APPEAL READ AS UNDER: . / ITA NO.3358/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 2 AGGRIEVED BY THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) - 8, MUMBAI [HEREINAFTER REFERRED TO AS T HE LEARNED CIT(A)], UNDER SECTION 250 OF THE INCOME-TAX ACT, 1961 (ACT) AND B ASED ON THE FACTS AND CIRCUMSTANCES OF THE CASE, M/S. VIOLET ARCH SECURIT IES PRIVATE LIMITED FORMERLY KNOWN AS (ALCHEMY SHARE & STOCK BROKERS PR IVATE LIMITED) [HEREINAFTER REFERRED TO AS THE APPELLANT] RESPECTF ULLY SUBMITS THAT THE LEARNED CIT(A) ERRED IN PARTLY UPHOLDING THE ORDER OF THE ASSISTANT COMMISSIONER OF INCOME-TAX, RANGE 4(1), MUMBAI, ON THE FOLLOWING GROUND: DISALLOWANCE OF TRANSACTION CHARGES IN UPHOLDING THE DISALLOWANCE MADE BY THE ASSISTANT COMMISSIONER OF INCOME-TAX, RANGE 4(1), MUMBAI, WITH REGARD TO TRAN SACTION CHARGES OF RS.7,254,317 PAID TO THE STOCK EXCHANGES ON THE GRO UND THAT NO TAXES WERE DEDUCTED THEREON UNDER SECTION 40(A)(IA) OF TH E ACT. THE APPELLANT PRAYS THAT THE AFORESAID ADDITION BE DELETED. 2. THE ASSESSEE IN PRESENT CASE HAS FILED FORM NO. 8 UNDER THE PROVISIONS OF SECTION 158A OF THE INCOME TAX ACT, 1961(THE ACT). SIMILAR FORM WAS ALSO FILED BY THE ASSESSEE IN RESPECT OF SIMILAR ISSUE FOR ASS ESSMENT YEAR 2007-08, WHEREIN MATTER WAS DISPOSED OF WITH THE FOLLOWING O BSERVATIONS VIDE ORDER DATED 15/05/2013 IN ITA NO.298/MUM/2011 A.Y.2007-08 (DEPARTMENTAL APPEAL). 7. SO FAR AS CHARGES ON ACCOUNT OF VSAT CHARGES AN D LEASELINE CHARGES, THE ISSUE IS NOW WELL SETTLED IN FAVOUR OF THE ASSESSEE BY TH E DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ITO VS ANGEL CAPITAL & DE BIT MARKET LTD. IN ITA (L) 475 OF 2011 DECIDED ON 28 TH JULY, 2011. THIS LEAVES THE ISSUE OF DEDUCTABILITY OF TRANSACTION CHARGES OF RS. 50,30,187/-, THE LD. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT THIS ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS M/S . KOTAK SECURITIES LTD IN ITA NO. 3111 OF 2009 DECIDED ON 21 ST OCTOBER 21.10.2011. HOWEVER, AT THE SAME TIME TH E LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE ORDER OF THE HONBLE SUPREME COURT BY WHICH THE HONBLE SUPREME COURT HAS ACCEPTED A S PECIAL LEAVE PETITION OF THE ASSESSEE ON IDENTICAL POINT OF LAW FOR PRECEDING AS SESSMENT YEAR. INVOKING THE PROVISIONS OF SEC. 158A OF THE ACT, THE ASSESSEE WA S ASKED TO FILE A DECLARATION THAT IF THE AO AGREES TO APPLY IN THE RELEVANT CASE THE FIN AL DECISION ON THE QUESTION OF LAW IN THE OTHER CASE, HE SHALL NOT RAISE SUCH QUESTION OF LAW IN THE RELEVANT CASE IN APPEAL BEFORE ANY APPELLATE AUTHORITY. THE ASSESSEE FILED THE NECESSARY DECLARATION IN FORM NO. 8. 8. THE LD. DEPARTMENTAL REPRESENTATIVE STATED THAT REVENUE HAS NO OBJECTION FOR ADMITTING THE DECLARATION FILED BY THE ASSESSEE. . / ITA NO.3358/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 3 9. CONSIDERING THE ABOVE FACTS IN THE LIGHT OF THE PROVISIONS OF SEC. 158A AND FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH C OURT (SUPRA), WE DIRECT THE AO TO ALLOW THE EXPENDITURE ON ACCOUNT OF VSAT CHARGES AND LEAS ELINE CHARGES. EXPENDITURE ON ACCOUNT OF TRANSACTION CHARGE IS ACCORDINGLY TO BE DISALLOWED SUBJECT TO THE OUTCOME OF THE SLP FILED BY THE ASSESSEE. COPY OF THE AFOREMENTIONED DECLARATION IN FORM NO.8 WAS ALSO FILED WITH THE LD. DR. LD. D.R DID NOT RAISE ANY OBJECTION. 3. IN THIS VIEW OF THE SITUATION, FOLLOWING THE AF OREMENTIONED DECISION OF HONBLE HIGH COURT WE UPHOLD THE DISALLOWANCE OF T RANSACTION CHARGES AND DISMISS THE APPEAL FILED BY THE ASSESSEE. IN PURSU ANCE OF SUB-SECTION (5) OF SECTION 158A WE DIRECT THE A.O THAT WHEN THE DECISI ON ON THE QUESTION OF LAW IN THE SLP BECOMES FINAL THE SAME SHOULD BE APPLIED TO THE PRESENT CASE AND IF NECESSARY ASSESSEE CAN ALSO FILE AN APPLICATION BEF ORE US FOR AMENDMENT OF THE ORDER AND ASSESSEE WILL NOT BE ENTITLED TO RAISE I N RELATION TO THE ISSUE INVOLVED IN QUESTION OF LAW IN APPEAL BEFORE HONBLE HIGH CO URT. WITH THESE OBSERVATIONS THE APPEAL FILED BY THE ASSESSEE IS DI SMISSED UNDER THE PROVISIONS OF SUB-SECTION (4) OF SECTION 158A OF THE ACT. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/06/2013 . * ,-' / 0!1 06/06/2013 - * 2 3 SD/- S D/- ( . / D.KARUNAKARA RAO ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 0! DATED 06/06/2013 . / ITA NO.3358/MUM/2012 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 4 . . . . * ** * '+45 '+45 '+45 '+45 65'+ 65'+ 65'+ 65'+ / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '(#& / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 582 '+! , , / DR, ITAT, MUMBAI 6. 2 9 / GUARD FILE. .! .! .! .! / BY ORDER, (5+ '+ //TRUE COPY// : :: : / ; ; ; ; $ $ $ $ (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ! . ./ VM , SR. PS