M/s.JRG Securities, Cochin V. ACIT, Cochin

ITA 339/COCH/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73916 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 24-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 10-12-2012
• Court: TRIBUNAL
• Department Lawyers: M ANIL KUMAR; LATHA V KUMAR
• Assessee Lawyers: SHERRY S OOMMEN
• Keywords: Opportunity of being heard; Revenue expenditure; Capital expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 339/COCH/2012 ASSESSMENT YEAR : 2007-08 M/S. JRG SECURITIES LTD., JRG HOUSE, ASHOKA ROAD, KALOOR, KOCHI-17. [PAN: AAACJ 7327G] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(2), KOCHI. (ASSESSEE -APPELLANT) (REVENUE-RESPONDEN T) ASSESSEE BY SHRI SHERRY S. OOMMEN, ADVOCATE REVENUE BY SMT. LATHA V. KUMAR, JR. DR AND SHRI M. ANIL KUMAR, CIT(DR) DATE OF HEARING 22/01/2014 DATE OF PRONOUNCEMENT 07/03/2014 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 11- 10-2012 PASSED BY THE LD. CIT(A)-II, KOCHI AND IT R ELATES TO THE ASSESSMENT YEAR 2007-08. 2. THOUGH THE ASSESSEE HAS RAISED AS MANY AS FIVE G ROUNDS, ALL OF THEM RELATED TO THE FOLLOWING TWO ISSUES: (A) DISALLOWANCE OF EXPENSES RELATING TO INITIAL P UBLIC OFFER- 29,57,136/-. (B) CORRECTNESS OF COMPUTATION OF INTEREST U/S. 23 4C OF THE ACT. 3. THE FACTS RELATING TO THE ISSUES ARE STATED IN B RIEF. THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF STOCK BROKING. DURIN G THE COURSE OF ASSESSMENT I.T.A. NO.339/COCH/2012 2 PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED A SUM OF RS.29,57,136/-, BEING EXPENSES RELATING TO INITI AL PUBLIC OFFER, AS REVENUE EXPENDITURE. THE ASSESSING OFFICER TOOK THE VIEW TH AT THE SAID EXPENSES HAVE BEEN INCURRED FOR INCREASING THE SHARE CAPITAL AND HENCE THEY ARE DIRECTLY RELATED TO THE EXPANSION OF THE CAPITAL BASE OF THE COMPANY , IN WHICH CASE THEY FALL IN THE CATEGORY OF CAPITAL EXPENDITURE. ACCORDINGLY, H E DISALLOWED THE CLAIM OF THE ASSESSEE. THE LD. CIT(A), BY PLACING RELIANCE ON TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF BROOKE BOND (INDIA) LTD VS. C IT (225 ITR 798), ALSO CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICE R. THE ASSESSEE CONTENDED BEFORE THE LD CIT(A) THAT THE AMOUNT OF INTEREST CO MPUTED U/S 234C IS NOT CORRECT. HOWEVER, THE FIRST APPELLATE AUTHORITY DI D NOT ADJUDICATE THE SAID ISSUE. HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 4. THE FIRST ISSUE RELATES TO THE CLAIM FOR DED UCTION OF INITIAL PUBLIC OFFER EXPENSES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE RAISED ADDITIONAL CAPITAL BY MAKING PUBLIC ISSUE OF ITS SHARES. IN T HAT REGARD, THE ASSESSEE INCURRED A SUM OF RS.1,47,85,680/- AS EXPENSES. TH E ASSESSEE HAS DECIDED TO WRITE OFF THE ABOVE SAID EXPENDITURE IN FIVE INSTAL MENTS AND ACCORDINGLY CLAIMED 1/5 TH OF THE SAME, I.E., RS.29,57,136/- AS DEDUCTION DUR ING THE YEAR UNDER CONSIDERATION. THE DETAILS OF THE EXPENSES INCURRE D BY THE ASSESSEE ARE EXTRACTED BELOW:- A. DIRECT EXPENSES :- NATURE OF EXPENSE AMOUNT (RS.) IPO COMMISSION DD ISSUED IN FAVOUR OF ROC FOR IPO AMOUNT PAID TO SHARE TRANSFER AGENTS OTHER FEES PAID TO ROC IN RELATION TO THE IPO 19,61,064 4,87,500 4,09,620 1,50,000 TOTAL AMOUNT 30, 08,184 I.T.A. NO.339/COCH/2012 3 B. INDIRECT EXPENSES :- NATURE OF EXPENSE AMOUNT (RS) A MOUNT (RS) ADVERTISEMENT EXPENSES 51,20,821 OTHER CHARGES POSTAGE & COURIER 10, 76,110 PRINTING & STATIONARY 15,62,080 MAINTENANCE CHARGES, STAFF TRAVELING EXPENSES, FOOD EXPENSES, PETROL EXPENSES 7,74,625 DRAFT FINANCIAL CHARGES PAID TO CHARTERED ACCOUNTANT 1,00,000 MARKET RESEARCH CHARGES PAID TO LEAD MANAGERS 31,43,860 66,56,675 TOTAL 117,77,496 TOTAL (A+B) = RS.1 ,47,85,680/- 1/5 TH THERE OF = RS. 29,57,136/- BEFORE US, THE LD A.R SUBMITTED THAT THE DIRECT EXP ENSES OF RS.30,08,194/- LISTED ABOVE ARE RELATED TO THE INITIAL PUBLIC OFFER AND A CCORDINGLY SUBMITTED THAT THE ASSESSEE DID NOT HAVE GRIEVANCE IN DISALLOWING THE SAME, I.E., 1/5 TH OF THE AMOUNT (RS.6,01,638/-) CLAIMED DURING THE YEAR UNDE R CONSIDERATION. WITH REGARD TO THE INDIRECT EXPENSES OF RS.1,17,77,496/- , LISTED ABOVE, THE LD A.R SUBMITTED THAT THE ABOVE SAID EXPENSES WOULD HAVE B EEN INCURRED BY THE ASSESSEE IRRESPECTIVE OF THE FACT WHETHER THE ASSES SEE WENT FOR INITIAL PUBLIC OFFER OF ITS SHARES OR NOTE. THE LD A.R FURTHER SU BMITTED THAT THESE EXPENSES WERE NOT CONTINGENT UPON COMPLETION OF THE INITIAL PUBLIC OFFER PROCESS AND HENCE, THEY SHOULD BE ALLOWED AS REVENUE EXPENDITUR E. THE LD COUNSEL PLACED RELIANCE ON THE FOLLOWING CASE LAW IN THIS CONNECTI ON. (A) DCIT VS. CORE HEALTH CARE LTD (308 ITR 263)(GU J) (B) CIT VS. KREON FINANCIAL SERVICES LTD (2013)(38 TAXMANN.COM 46)(MAD) (C) CIT VS. INDO NISSIN FOODS LTD (2013)(35 TAXMA NN.COM 637)(KAR) (D) CIT VS. BERGER PAINTS INDIA LTD (126 TAXMAN 43 5)(CAL) I.T.A. NO.339/COCH/2012 4 (E) BOMBAY BURMAH TRADING CORPORATION LTD VS. CIT (12 TAXMAN 178)(BOM) (F) WARNER HINDUSTAN LTD VS. CIT ( 171 ITR 224)(A P) (G) DCIT VS. METRO SHOES (P) LTD ( 2 SOT 127)(MUM - TRIB) (H) NIMBUS COMMUNICATIONS LTD VS. ACIT (ITA NO.23 61 OF MUM TRIB) 5. WE HAVE GONE THROUGH THE CASE LAWS RELIED U PON BY LD A.R. IN OUR VIEW, THEY ARE DISTINGUISHABLE. IN THE CASE OF CORE HEAL TH CARE LTD (SUPRA), THE ISSUE WAS REGARDING SPECIAL ADVERTISEMENT CAMPAIGN UNDERT AKEN TO CREATE A CORPORATE IMAGE OF THE ASSESSEE THEREIN. FURTHER IT WAS DONE KEEPING IN VIEW OF THE FORTHCOMING PUBLIC ISSUE. WHEREAS IN THE INSTANT C ASE, THE ADVERTISEMENT WAS DONE IN CONNECTION WITH THE PUBLIC ISSUE AND FURTHE R THEY WERE RELATED TO THE PUBLIC ISSUE ONLY. IN THE CASE OF KREON FINANCIAL SERVICES LTD (SUPRA), THE HONBLE MADRAS HIGH COURT DID NOT LAY DOWN ANY PRIN CIPLE AND IT HAS UPHELD THE ORDER OF TRIBUNAL IN VIEW OF THE CONCURRENT FINDING S GIVEN BY LD CIT(A) AND TRIBUNAL. THE DECISION RENDERED BY HONBLE KARNATA KA HIGH COURT IN THE CASE OF INDO NISSIN FOODS LTD (SUPRA) AND ALSO THE DECISION RENDERED BY THE CALCUTTA HIGH COURT IN THE CASE OF BERGER PAINTS INDIA LTD (SUPRA ) ARE NOT RELATED TO THE INITIAL PUBLIC OFFER EXPENSES. IN THE CASE OF BOMBAY BUR MAH TRADING CORPORATION LTD (SUPRA) AND ALSO IN THE CASE OF WARNER HINDUSTAN LT D (SUPRA), THE ISSUE RELATED TO THE EXPENSES INCURRED IN CONNECTION WITH THE ISS UE OF BONUS SHARES AND NOT INITIAL PUBLIC OFFER. THE DECISION RENDERED IN THE CASE OF METRO SHOES (P) LTD DOES NOT RELATE TO EXPENSES INCURRED ON INITIAL PUB LIC OFFER. THE DECISION RENDERED IN THE CASE OF NIMBUS COMMUNICATION LTD RE LATE TO THE EXPENSES INCURRED ON THE PROPOSED PUBLIC ISSUE, WHICH WAS AB ORTED LATER. THUS, IN OUR VIEW, ALL THE CASE LAW RELIED UPON BY THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE. I.T.A. NO.339/COCH/2012 5 6. ON THE CONTRARY, IN OUR VIEW, THE DECISION R ENDERED BY HONBLE SUPREME COURT IN THE CASE OF BROOKE BOND (INDIA) LTD (SUPRA ) IS SQUARELY APPLICABLE TO THE FACTS OF THE INSTANT CASE. WE HAVE ALREADY NOTICED THAT THE LD CIT(A) HAS RENDERED HIS DECISION BY FOLLOWING THE SAME. FOR T HE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVATIONS MADE BY LD CIT(A):- 15. IN GROUND NO. 4, THE APPELLANT CHALLENGES TH E DISALLOWANCE OF RS. 29,57,136/- CLAIMED AS REVENUE EXPENDITURE STAT ED TO HAVE BEEN INCURRED BY IT IN CONNECTION WITH INITIAL PUBL IC OFFER OF SHARES. IT IS THE ARGUMENT OF THE APPELLANT THAT WHILE COMP UTING THE TAXABLE INCOME, THE ASSESSING OFFICER HAS DISALLOWE D AN AMOUNT OF RS. 29,57,136/- AS CAPITAL EXPENDITURE IN SPITE OF THE CLAIM OF THE APPELLANT THAT THE AO IS WRONG IN ARRIVING AT THE C ONCLUSION THAT THE AMOUNT OF RS. 29,57,136/- INCURRED BY THE APPELLANT AS CAPITAL EXPENDITURE AND TAXING THE SAME. IT WAS ARGUED AT THE TIME OF HEARING THAT THE EXPENSES INCURRED ON INITIAL PUBLI C OFFERS INCLUDE EXPENSES WHICH ARE PURELY REVENUE IN NATURE SUCH AS ADVERTISING, TRAVELING, POSTAGE ETC. AND THUS THE INFERENCE DRAW N-UP BY THE ASSESSING OFFICER IS NOT CORRECT. THE APPELLANT SUB MITS THAT THE CLAIM OF THE APPELLANT THAT THE EXPENSES ARE PURELY OPERATIONAL IN NATURE AND WAS SOLELY SPENT FOR THE FURTHERANCE OF APPELLANTS BUSINESS CONSIDERATION BY WIDENING ITS COMPETITIVE LANDSCAPE IN THE GIVEN MARKET SCENARIO MAY BE ACCEPTED. 15.1 THE FURTHER CONTENTION RAISED BY THE APPELLAN T IN THIS REGARD IS THAT EXPENSES INCURRED AND CLAIMED TOWARDS ISSUE OF PUBLIC OFFERINGS DOES NOT RESULT IN SECURING A TANGIBLE OR INTANGIBLE ASSET OR ANY CORPORATE RIGHT, SO AS TO BRINGING FORTH END URING BENEFITS TO THE APPELLANT COMPANY. 15.2 I HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE ARGUMENTS GIVEN BY THE APPELLANT AS WELL AS FACTS MENTIONED IN THE ASSESSMENT ORDER. THE ASSESSING OFFICER IN THE ASSESSMENT ORD ER DISALLOWED THE ENTIRE CLAIM OF EXPENSES ON IPO (INITIAL PUBLIC OFFER) TREATING THE SAME AS CAPITAL EXPENDITURE. THE ASSESSING OFF ICER PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE SUPREME COU RT IN THE CASE OF BROOKE BOND (INDIA) LTD. V. CIT REPORTED 225 ITR 798 (SC). ON THE OTHER HAND IT WAS ARGUED ON BEHALF OF THE APPEL LANT THAT ONLY DIRECT EXPENSES SUCH AS PAYMENT TO REGISTRAR OF COM PANIES, ETC. ARE TO BE TREATED AS CAPITAL EXPENDITURE. IT HAS B EEN FURTHER STATED THAT EXPENSES SUCH AS ADVERTISEMENT FOR PUBLIC ISSU E, TRAVELING I.T.A. NO.339/COCH/2012 6 EXPENSES FOR THE PURPOSE OF IPO AND OTHER RELATED E XPENSES SUCH AS MARKET RESEARCH AND POSTAGE EXPENSES CANNOT BE H ELD TO BE CAPITAL IN NATURE. THE APPELLANT ALSO PLACE RELIAN CE ON A NUMBER OF JUDICIAL PRONOUNCEMENTS, WHICH AHS BEEN CITED SUPRA . 15.3 I HAVE GONE THROUGH THE JUDGMENT OF THE HONB LE SUPREME COURT IN THE CASE OF M/S. BROOKE BOND INDIA LTD. T HE HONBLE APEX COURT IN THE SAID JUDGMENT HAS HELD AS UNDER: IT IS NO DOUBT TRUE THAT BEFORE THE AAC AS WELL A S BEFORE THE TRIBUNAL IT WAS SUBMITTED ON BEHALF OF THE ASSESSE E THAT INCREASE IN THE CAPITAL WAS TO MEET THE NEED FOR W ORKING FUNDS FOR THE ASSESSEE COMPANY. BUT THE STATEMENT OF CASE SENT BY THE TRIBUNAL DOES NOT INDICATE THAT A FIND ING WAS RECORDED TO THE EFFECT THAT THE EXPANSION OF THE C APITAL WAS UNDERTAKEN BY THE ASSESSEE FOR THE PURPOSE OF MEET ING THE NEED FOR WORKING FUNDS FOR THE ASSESSEE TO CARRY O N ITS BUSINESS. THOUGH THE INCREASE IN THE CAPITAL RESU LTS IN EXPANSION OF THE CAPITAL BASE OF THE COMPANY AND INCIDENTALLY THAT WOULD HELP IN THE BUSINESS OF TH E COMPANY AND MAY ALSO HELP IN THE PROFIT-MAKING, THE EXPENS ES INCURRED IN THAT CONNECTION STILL RETAIN THE CHARA CTER OF A CAPITAL EXPENDITURE SINCE THE EXPENDITURE IS DIREC TLY RELATED TO THE EXPANSION OF THE CAPITAL BASE OF THE COMPAN Y. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TR IBUNAL WAS RIGHT IN SUSTAINING THE DISALLOWANCE OF RS. 13,99, 305 BEING EXPENSES INCURRED IN CONNECTION WITH THE ISSUE OF FRESH LOT OF SHARES. T 15.4 ON A PERUSAL OF THE ABOVE JUDGMENT OF THE HON BLE COURT, IT CAN BE SAID THAT NOWHERE THE HONBLE COURT HAS MADE ANY DI STINCTION BETWEEN DIRECT AND INDIRECT EXPENSES WITH REGARD TO PUBIC I SSUE OF SHARES. THE HONBLE COURT HAS ONLY SAID THAT EXPENSES WHICH ARE RELATABLE TO PUBLIC ISSUE OF SHARES ARE TO BE TREATED AS CAPITAL IN NAT URE. THE ARGUMENT OF THE APPELLANT THAT EXPENDITURE ON ADVERTISEMENT FOR IPO, MARKET RESEARCH EXPENSES RELATED TO IPO, TRAVELING EXPENSES AND POS TAL EXPENSES ETC. ARE INDIRECT EXPENSES AND THEREFORE THE SAME IS TO BE T REATED REVENUE IN NATURE IS NOT ACCEPTABLE. ADVERTISEMENT HAS TO BE CARRIED ON FOR THE PURPOSE OF DRAWING INTEREST OF THE GENERAL PUBLIC F OR THE SUBSCRIPTION TO THE SHARES. SIMILARLY MARKET RESEARCH EXPENSES, AS WELL AS POSTAL EXPENSES FOR DISPATCH OF VARIOUS DOCUMENTS RELATED TO IPO ARE ALSO DIRECTLY LINKED TO THE PUBLIC ISSUE OF SHARES. SIM ILARLY, JOURNEYS UNDERTAKEN BY THE PROMOTERS AND EMPLOYEES FOR THE P URPOSE OF IPO ARE I.T.A. NO.339/COCH/2012 7 ALSO RELATED TO IPO. THUS ALL THE ACTIVITIES ARE DI RECTLY AND INTRICATELY LINKED WITH THE INITIAL PUBLIC OFFER OF SHARES, AND, THERE FORE, THEY ARE PART AND PARCEL OF EXPENSES PERTAINING TO PUBLIC ISSUE OF SH ARES. THE RELIANCE PLACE BY THE APPELLANT ON VARIOUS CASE LAWS ARE DISTINGUI SHABLE ON FACT AS BECAUSE NONE OF THE CASES CITED BY THE APPELLANT DE AL WITH PUBLIC ISSUE OF SHARES. I, ACCORDINGLY HOLD THAT THE ASSESSING OFF ICER WAS JUSTIFIED IN TREATING THE ENTIRE EXPENDITURE OF RS.29,57,136/- A S CAPITAL EXPENDITURE. THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F BROOKE BOND INDIA LTD. CITED SUPRA FULLY APPLIES TO THE FACTS OF THE APPELLANTS CASE. THIS GROUND OF APPEAL RAISED BY THE APPELLANT IN THIS RE GARD IS THEREFORE DISMISSED. WE NOTICE THAT THE LD CIT(A) HAS EXAMINED THE VARIO US EXPENSES INCURRED BY THE ASSESSEE IN TERMS OF THE DECISION RENDERED BY HONB LE SUPREME COURT IN THE CASE OF BROOKE BOND (INDIA) LTD (SUPRA). ACCORDINGLY, W E AGREE WITH THE VIEW EXPRESSED BY LD CIT(A). 7. THE LD A.R ALTERNATIVELY CONTENDED THAT THE I NITIAL PUBLIC OFFER EXPENSES ARE CONSIDERED AS PRELIMINARY EXPENSES UNDER SEC. 35D OF THE ACT. HE FURTHER SUBMITTED THAT THE PROVISIONS OF SEC. 35D WAS EXTEN DED TO THE SERVICE SECTOR ALSO BY THE FINANCE ACT, 2008 BY OMITTING THE WORD INDU STRIAL FROM SEC. 35D OF THE ACT. THE LD COUNSEL SUBMITTED THAT THE EXPENSES IN CURRED IN CONNECTION WITH ISSUE, FOR PUBLIC SUBSCRIPTION, OF SHARES OF THE CO MPANY, BEING UNDERWRITING COMMISSION, BROKERAGE AND CHARGES FOR DRAFTING, TYP ING, PRINTING AND ADVERTISEMENT OF PROSPECTUS ARE COVERED UNDER SEC. 35D(2) OF THE ACT. HE FURTHER SUBMITTED THAT THE PRELIMINARY EXPENSES ARE ALLOWED AS DEDUCTION IN FIVE ANNUAL INSTALMENTS U/S 35D OF THE ACT. ACCORDINGLY HE SUBMITTED THAT THE DEDUCTION CLAIMED BY THE ASSESSEE IS IN TERMS OF SE C. 35D OF THE ACT. 8. HOWEVER, WE NOTICE THAT THE ALTERNATIVE CONT ENTION OF THE ASSESSEE FOR DEDUCTION U/S 35D OF THE ACT WAS NOT EXAMINED BY TH E AO. ACCORDINGLY, IN OUR VIEW, THE SAME REQUIRES TO BE CONSIDERED AT THE END OF THE ASSESSING OFFICER. ACCORDINGLY, WE RESTORE THIS ALTERNATIVE CONTENTION TO THE FILE OF THE AO WITH THE I.T.A. NO.339/COCH/2012 8 DIRECTION TO EXAMINE THE SAME AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW, AFTER AFFORDING NECESSARY OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. 9. THE NEXT ISSUE RELATES TO THE COMPUTATION OF INTEREST CHARGEABLE U/S 234C OF THE ACT. ACCORDING TO THE ASSESSEE THE INTEREST U/S 234C IS REQUIRED TO BE COMPUTED AFTER DEDUCTING THE AMOUNT OF TAX DEDUCTI BLE AT SOURCE INSTEAD OF ACTUAL AMOUNT OF TAX DEDUCTED AT SOURCE. ACCORDING TO THE ASSESSEE, THE AO HAS COMPUTED THE INTEREST U/S 234C AFTER DEDUCTING ACTU AL AMOUNT OF TAX DEDUCTED AT SOURCE INSTEAD OF DEDUCTING THE TAX DEDUCTIBLE AT SOURCE. WE NOTICE THAT THE LD CIT(A) DID NOT ADJUDICATE THIS ISSUE, THOUGH IT WAS CONTENDED BEFORE HIM BY THE ASSESSEE. BE THAT AS IT MAY, A PERUSAL OF EXPLA NATION TO SEC. 234C SHOWS THAT THE TAX DUE ON THE RETURNED INCOME IS REQUIR ED TO BE DETERMINED BY REDUCING THE AMOUNT OF ANY TAX DEDUCTIBLE OR COLLEC TIBLE AT SOURCE IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII ON ANY INCOME W HICH IS SUBJECT TO SUCH DEDUCTION OR COLLECTION AND WHICH IS TAKEN INTO ACC OUNT IN COMPUTING SUCH TOTAL INCOME. HENCE, WE FIND FORCE IN THE CONTENTION OF THE ASSESSEE. HOWEVER, IN OUR VIEW, THIS CLAIM ALSO REQUIRES EXAMINATION AT T HE END OF THE ASSESSING OFFICER, SINCE IT IS REQUIRED TO BE EXAMINED AS TO WHETHER A NY INCOME IS SUBJECT TO DEDUCTION OR COLLECTION AT SOURCE AND WHETHER SUCH INCOME WAS TAKEN IN ACCOUNT IN COMPUTING SUCH TOTAL INCOME IN TERMS OF THE EXPLA NATION TO SEC. 234C. ACCORDINGLY, WE RESTORE THIS ISSUE ALSO TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE CLAIM OF THE ASSESSEE IN TERMS OF THE P ROVISIONS OF SEC. 234C OF THE ACT AND TAKE APPROPRIATE DECISION IN ACCORDANCE WIT H THE LAW, AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. I.T.A. NO.339/COCH/2012 9 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 07-03-2014 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 7TH MARCH, 2014 GJ COPY TO: 1. M/S. JRG SECURITIES LTD., JRG HOUSE, ASHOKA ROAD , KALOOR, KOCHI-17. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(2), KOCHI. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN