ACIT CIR 4(2), MUMBAI V. PRAVIN V SHAH STOCK BROKING P.LTD, MUMBAI

ITA 56/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71234 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 24-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 03-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROUMUAN PAITE
• Assessee Lawyers: KANTILAL B PAREKH A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C MUMBAI . . , / !' , # $ % BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER /AND SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER ITA NO.56/MUM/2012 (A. Y 2006-07) THE ACIT, CIR. 4(2), ROOM NO.642, 6 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI - 400020 / VS. M/S. PRAVIN V. SHAH STOCK BROKING PVT. LTD. 212, STPCC EXCHANGE TOWER, DALAL STREET, FORT, MUMBAI 400 001. : # ./ ;< ./ PAN/GIR NO. : AAACP 6911C ( := / APPELLANT ) .. ( >?:= / RESPONDENT ) APPELLANT BY SHRI ROUMUAN PAITE RESPONDENT BY : SHRI KANTILAL B. PAREKH @ A# / DATE OF HEARING : 24/09//2013 BCD @ A# / DATE OF PRONOUNCEMENT : 24/09/2013 E / O R D E R PER I.P.BANSAL, JM: THIS APPEAL IS FILED BY THE REVENUE. IT IS DIREC TED AGAINST ORDER PASSED BY LD. CIT(A)-9 MUMBAI DATED 13/10/2011 FOR ASSES SMENT YEAR 2006-07. GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF STT AMOUNTING TO RS.9,90,487/- AND ADMITTING EVIDENCE IN THE FORM OF LEDGER ACCOUNT OF STT AND VIOLATION OF RULE 46A OF THE INCOME TAX RULES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE IMPUGNED ORDER OF THE LD.CIT(A) IS CONTRARY TO LAW TO BE SET ASIDE AND TH AT OF THE ASSESSING OFFICER BE RESTORED. ITA NO.56/MUM/2012 (A. Y 2006-07) 2 2. IT MAY BE MENTIONED HERE THAT THE ISSUE WHICH HA S BEEN DECIDED BY LD. CIT(A) WAS RESTORED BACK TO HIS FILE BY THE TRIBU NAL VIDE ITS ORDER DATED 3/2/2011 IN ITA NO.1983/MUM/2010. THE RELEVANT OBS ERVATION OF THE TRIBUNAL AS CONTAINED IN PARA 6 ARE AS FOLLOWS: 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE CLAIM OF THE ASSESSEE IS THAT IN SOME CASES SIT WAS CHARGED SEPARATELY AND IN OTHER CASES THE STT WAS INCLUDED IN THE BROKERAGE BILL AND IN BOTH CASES TH E ASSESSEE WORKED AS A MIDDLE MAN ON BEHALF OF GOVERNMENT TO COLLECT STT AND PAID THE SAME TO THE GOVERNMENT TREASURY THROUGH STOCK EXCHANGE, THEREFO RE, THE STT COLLECTED BY THE ASSESSEE WHICH WAS SUBSEQUENTLY PAID IS NEITHER THE INCOME OF THE ASSESSEE NOR THE EXPENDITURE AND HENCE THE SAME IS NOT LIABL E TO TAX. PER CONTRA THE CLAIM BY THE REVENUE IS THAT IN VIEW OF THE SPECIFIC PROV ISIONS OF PROHIBITION OF ALLOWANCE OF DEDUCTION ON STT ULS.40(A)(IB) AND TAX REBATE U/S.88E THE CLAIM OF DEDUCTION OF RS.9,90,487 ULS.37 IS NOT ALLOWABLE. F ROM THE READING OF THE ASSESSMENT ORDER AND THE ORDER BY THE LEARNED CIT(A ), WE FIND THAT BOTH THE AUTHORITIES HAVE NOT EXAMINED THE FACTS OF THE ASSE SSEES CASE IN THE LIGHT OF MATERIAL AVAILABLE ON RECORD AND THE DISALLOWANCE W AS MADE MERELY BY FOLLOWING THE PROVISIONS OF SECTION 40(A)(IB) OF THE ACT. THE RE IS NO FINDING AS TO WHETHER THE ASSESSEE HAS COLLECTED STT ON BEHALF OF CLIENTS AND THE SAME WAS PAID TO THE GOVERNMENT AS PROVIDED UNDER THE ACT. THIS BEING SO AND KEEPING IN VIEW THAT THE ASSESSEE HAS NOT FILED RELEVANT MATERIAL EXCEPT DETAILED NOTE BEFORE THE ASSESSING OFFICER AND ALL OTHER PAPERS WERE FILED B EFORE THE LEARNED CIT(A), WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE THE MATTER SHOULD GO BACK TO THE FILE OF CIT(A) AND ACCORDINGLY WE SET ASIDE THE ORDER PA SSED BY THE REVENUE AUTHORITIES ON THIS ACCOUNT AND SEND THE MATTER TO THE FILE OF CIT(A) WHO SHALL DECIDE THE SAME AFRESH IN THE LIGHT OF THE OBSERVAT IONS HEREIN ABOVE AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. THE GROUND TAKEN BY THE ASSESSEE IS THERE FORE PARTLY ALLOWED FOR STATISTICAL PURPOSE. ACCORDINGLY, LD. CIT(A) HAS EXAMINED THE ISSUE AND HAS RETURNED A FINDING THAT AMOUNT OF RS.9,90,487/- WAS NOT CREDITED IN THE TRA DING ACCOUNT BUT WAS CREDITED TO SEPARATE ACCOUNT AND THE SAME WAS PAID TO GOVERNMENT TREASURY. THIS AMOUNT WAS NOT CLAIMED BY THE ASSESSEE AS EXPE NDITURE, THEREFORE, THE SAME CANNOT BE DISALLOWED. LD. CIT(A) HAS FURTHER FOUND THAT THIS STT WAS COLLECTED ON BEHALF OF GOVERNMENT OF INDIA AS INTER MEDIARY AS WAS REQUIRED UNDER PROVISIONS OF THE ACT, THEREFORE, STT COLLECT ED FROM THE CLIENTS EITHER DIRECTLY OR EMBEDDED IN THE BROKERAGE AND PAID TO GOVERNMENT OF INDIA THROUGH BSE CANNOT BE TREATED AS INCOME OF THE ASS ESSEE AS ASSESSEE IS NOT ENRICHED BY THE STT SUBSEQUENTLY PAID TO GOVERNMENT TREASURY THROUGH BSE. ITA NO.56/MUM/2012 (A. Y 2006-07) 3 IT IS AGAINST THIS FINDING OF LD. CIT(A) THE DEPART MENT HAS FILED AFOREMENTIONED APPEAL. 3. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. THE ISSUE HAS BEEN DECIDED BY LD. CIT( A) IN ACCORDANCE WITH THE DIRECTION OF ITAT AND IT HAS BEEN CLEARLY FOUND BY LD. CIT(A) THAT STT WAS COLLECTED BY THE ASSESSEE ON BEHALF OF GOVERNMENT O F INDIA IN THE CAPACITY OF INTERMEDIARY. THESE FINDINGS HAVE NOT BEEN CHALLEN GED BY BRINGING ANY MATERIAL ON RECORD BY THE REVENUE. THEREFORE, WE A RE OF THE OPINION THAT THERE IS NO INFIRMITY IN THE ORDER PASSED BY LD. CIT(A). WE DECLINE TO INTERFERE AND THE APPEAL FILED BY THE REVENUE IS DISMISSED. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/ 09/2013 E @ BCD # F GH 24 /09/2013 C @ I % SD/- SD/- ( !' / N.K.BILLAIYA ) ( . . / I.P. BANSAL ) # / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; G DATED 24 /09/2013 E E E E @ @@ @ >AJK >AJK >AJK >AJK LKDA LKDA LKDA LKDA / COPY OF THE ORDER FORWARDED TO : 1. := / THE APPELLANT 2. >?:= / THE RESPONDENT. 3. M ( ) / THE CIT(A)- 4. M / CIT 5. KNI >A , , / DR, ITAT, MUMBAI 6. IO P / GUARD FILE. E E E E / BY ORDER, ?KA >A //TRUE COPY// Q QQ Q / R R R R ; ; ; ; (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . . ./ VM , SR. PS