MANALI TRADING & HOLDING P.LTD, MUMBAI V. ITO (TDS) WD 2(3), MUMBAI

ITA 3939/MUM/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0288 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 24-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Assessee Lawyers: DYANESHWAR
• Keywords: Non-deduction of tax

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NOS. 3939&1048/MUM/2015 (ASSESSMENT YEARS 2010-11& 2011-12) M/S. MANALI TRADING & HOLDING PVT. LTD., D/611, NEELKANTH BUSINESS PARK, NATHANI ROAD, VIDYAVIHAR (WEST), MUMBAI 400089 PAN:AAACM7396J ...... APPELLANT VS. THE ITO (TDS),WARD 2(3), MUMBAI 400051. .... RESPONDENT APPELLANT BY : SHRI DYANESHWAR RESPONDENT BY : SHRI T.A.KHAN DATE OF HEARING : 23/11/2017 DATE OF PRONOUNCEMENT : 16/ 02 /201 8 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEALS FILED BY THE ASSESSEE PERTA INING TO ASSESSMENT YEARS 2010-11 AND 2011-12 ARE DIRECTED AGAINST SEPA RATE ORDERS PASSED BY CIT(A)-14, MUMBAI DATED 18/08/2014, WHICH IN TURN A RISE OUT OF AN ORDERS PASSED BY THE ASSESSING OFFICER UNDER SECTION 201 (1)/201(1A) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 09/03/2012 . 2 ITA NO. 3939&1048/MUM/2015 (ASSESSMENT YEARS 2010-11&2011-12) 2. IN BOTH THE CAPTIONED APPEALS A COMMON ISSUE ARI SES, WHICH RELATES TO TAX DEDUCTIBLE AT SOURCE ON TRANSACTION CHARGES PAI D TO THE STOCK EXCHANGE. IN ASSESSMENT YEAR 2010-11 ASSESSEE PAID TRANSACTION CHARGES TO BSE OF RS.20,577/- AND RS.9,54,604/- TO NSE AND IN ASSESSM ENT YEAR 2011-12 IT PAID TRANSACTION CHARGES OF RS.7,87,976/- TO NSE. AS PER THE REVENUE, THE TRANSACTION CHARGES PAID TO THE STOCK EXCHANGES WER E FEE FOR TECHNICAL SERVICES COVERED WITHIN THE MEANING OF SECTION 194J OF THE A CT AND THUS, TAX WAS REQUIRED TO BE DEDUCTED AT SOURCE ACCORDINGLY. THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE REFERRED TO THE JUDGMENT OF THE HO N'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS.KOTAK SECURITIES LTD.(2011) 15 TAXMANN.COM77(BOM) IN SUPPORT. AGAINST SUCH A DECISION, ASSESSEE IS IN F URTHER APPEAL BEFORE US. 3. AT THE TIME OF HEARING, IT WAS AN AGREED POSITIO N THAT THE ISSUE RELATING TO THE TRANSACTION CHARGES PAID TO STOCK EXCHANGES IS NOW SETTLED BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KOTAK SECURITIES LTD. IN CIVIL APPEAL NO.3141 OF 2016 & OTHERS DATED 29/03/2016, W HEREBY IT HAS BEEN HELD THAT HAVING REGARD TO THE NATURE OF PAYMENTS WHICH ARE INDEED PAID FOR FACILITIES MADE BY THE STOCK EXCHANGES, NO TAX IS D EDUCTIBLE AT SOURCE UNDER SECTION 194J OF THE ACT. PERTINENTLY THE DECISION OF THE HON'BLE BOMBAY HIGH COURT (SUPRA) RELIED UPON BY THE LOWER AUTHORITIES HAS SINCE BEEN REVERSED BY THE HON'BLE SUPREME COURT AND, THEREFORE, WE ARE U NABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW TREATING THE ASSESS EE AS AN ASSESSEE IN DEFAULT FOR NON-DEDUCTION OF TAX AT SOURCE UNDER SECTION 19 4J OF THE ACT, QUA THE TRANSACTION CHARGES PAID TO STOCK EXCHANGES. 3 ITA NO. 3939&1048/MUM/2015 (ASSESSMENT YEARS 2010-11&2011-12) 4. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLO WED AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 16/02/201 8. SD/- SD/- (RAVISH SOOD) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 16/02/2018 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI