K.K. STOCK MANAGEMENT P. LTD, MUMBAI V. ASST CIT CIR 4(3), MUMBAI

ITA 5563/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92850 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 26-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Keywords: Bonafide belief

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 5563/MUM/2013 ( / ASSESSMENT YEAR : 2010 - 11 K.K. STOCK MANAGEMENT PVT. LTD., 105/4 GROUND FLOOR, BOMBAY SAMACHAR MARG , MUMBAI - 400 023 / VS. THE ACIT 4(3), MUMBAI ./ ./ PAN/GIR NO. : AABCK 4486G ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: NONE / RESPONDENT BY : SHRI ASGHAR ZAIN / DATE OF HEARING : 2 5 . 0 6 .2015 / DATE OF PRONOUNCEMENT : 2 5 .0 6 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS IS AN APPEAL BY THE ASSESSEE PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 8 , MUMBAI DT. 9.7.2013 PERTAINING TO ASSESSMENT YEAR 20 1 0 - 1 1 . 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN SUSTAINING ADDITION OF RS. 9,45,819/ - MADE BY THE AO ON ACCOUNT OF NON DEDUCTION OF TAX U/S. 194J ON TRANSACTION CHARGES. ITA. NO. 5563/M/2013 2 3. NONE APPEARED BEFORE US THEREFORE WE DECIDE D TO PROCEED EX PARTE. 4. THE ASSESSEE IS A STOCK BROKER AND ALSO INVESTOR IN SHARES AND SECURITIES. WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS DEBITED TRANSAC TION CHARGES AT RS. 9,45,819/ - . ON VERIFICATION, THE AO FOUND THAT ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE. THE ASSESSEE WAS ASKED TO JUSTIFY ITS CLAIM. THE ASSESSEE FILED A DETAILED REPLY, RELEVANT PORTION OF WHICH IS INCORPORATED BY THE AO AT PAGE - 2 AN D 3 OF HIS ORDER. THE SUBMISSIONS MADE BY THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO. DRAWING SUPPORT FROM THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF KOTAK SECURITIES LTD. IN ITA NO. 3111 OF 2009 DT. 21.10.2011 , THE AO DISALLOWED RS . 9,45,819/ - U/S. 40(A)(IA) OF THE ACT. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 6. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ORDERS OF THE REVENUE AUTHORITIES. 7. WE HAVE GIVEN A THO UGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE RETURN OF INCOME WAS FILED ON 23.9.2010 AND THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF KOTAK SECURITIES LTD. (SUPRA) WAS DELIVERED ON 21.10.2011 WHICH MEAN S THAT ON THE DATE OF FILING OF THE RETURN THE DECISION OF THE HONBLE BOMBAY HIGH COURT WAS NOT AVAILABLE. IT WOULD BE PERTINENT TO MENTION THE OBSERVATION OF THE HONBLE HIGH COURT IN THE CASE OF KOTAK SECURITIES LTD. HOWEVER, SINCE BOTH THE REVENUE AND THE ASSESSEE WERE UNDER THE BONAFIDE BELIEF FOR NEARLY A DECADE THAT TAX WAS NOT DEDUCTIBLE AT SOURCE ON PAYMENT OF TRANSACTION CHARGES, ITA. NO. 5563/M/2013 3 NO FAULT CAN BE FOUND WITH THE ASSESSEE IN NOT DEDUCTING THE TAX AT SOURCE IN THE ASSESSMENT YEAR IN QUESTION AND C ONSEQUENTLY DISALLOWANCE MADE BY THE AO U/S. 40(A)(IA) OF THE ACT IN RESPECT OF THE TRANSACTION CHARGES CANNOT BE SUSTAINED. 7.1. AS MENTIONED ELSEWHERE, THE RETURN WAS FILED PRIOR TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT. DRAWING SUPPORT FROM T HE AFOREMENTIONED OBSERVATIONS, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION OF RS. 9,45,819/ - . 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. OR DER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 2 5 TH JUNE , 2015 . SD/ - SD/ - ( I.P. BANSAL ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 2 5 TH JUNE , 2015 . . ./ RJ , 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