TRUSTED SHARES & INVESTMENT LTD, MUMBAI V. ITO TDS 3(4), MUMBAI

ITA 6647/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3333 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 03-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAV
• Section: 201(1); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E, MUMBAI BEFORE SHRI SANJAY ARAORA, ACCOUNTANT MEMBER A ND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.6647 TO 6650/MUM/2014 ASSESSMENT YEARS: 2008-09 TO 2011-12 TRUSTED SHARES & INVESTMENT LTD. 112, CHURCHGATE CHAMBERS, 5, MARINE LINES, MUMBAI-400020. PAN: AAACT4465H VS. ITA (TDS) -3(4), MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BHUPENDRA SH AH (AR) REVENUE BY : SHRI VISHWAS JADHAV (DR) DATE OF HEARING : 30.05.2016 DATE OF PRONOUNCEMENT : 30.05.2016 O R D E R PER BENCH: 1. THESE FOUR APPEALS FILED BY ASSESSEE AGAINST THE OR DER OF CIT(A)-14, MUMBAI DATED 02.09.2014 FOR AYS 2008-09 TO 2011-12. IN ALL THE APPEALS THE ASSESSEE HAS RAISED IDENTICAL GROUNDS OF APPEAL. (I) AO ERRED IN LEVYING INTEREST U/S. 201(1A) AND ALSO ALLEGED SHORT PAYMENT OF TDS, EVEN THOUGH TDS WAS NOT DEDUCTABLE WHEN TRANSACTION CHARGES WERE PAID. (II) LD.CIT(A) ALSO ERRED IN CONFIRMING THE ADDITION BY PASSING EX-PARTE ORDER WITHOUT GRANTING ANY OPPORTUNITY OF BEING HEA RD. 2. AS ALL APPEALS ARE BASED ON IDENTICAL FACTS AND IDE NTICAL GROUNDS OF APPEALS ARE RAISED BY THE ASSESSEE. FOR THE SAKE OF CONVENIENCE , WE ARE DISCUSSING WITH THE FACT OF ITA NO. 6647/MUM/14 FOR AY-2008-09. 3. THE BRIEF FACTS OF THE CASE ARE THAT ON RECEIPT OF INFORMATION FROM BOMBAY STOCK EXCHANGE (BSE)/NATIONAL STOCK EXCHANGE (NSE) IT WAS NOTICED THAT ASSESSEE HAS NOT DEDUCTED TDS ON THE PAYMENT ON ACCOUNT OF TRANS ACTION CHARGES MADE TO NSE AND BSE AMOUNTING TO RS. 4,71,819/- AS PER THE PROVISION OF SECTION 194J OF 2 ITA NOS.6647 TO 6650/M/2014- TRUSTED SHARES & INVES TMENTS LTD. THE ACT. THE ASSESSEE WAS ISSUED A SHOW CAUSE NOTIC E DATED 05.03.2012, SEEKING EXPLANATION AS TO WHY THE ASSESSEE SHOULD NOT BE TR EATED AS ASSESSING DEFAULT IN TERM OF SECTION 201(1) & 201(1A) OF THE ACT, FOR NO N-DEDUCTION OF TDS ON THE PAYMENTS AS PER THE REQUIREMENT OF PROVISION OF SEC TION 194J OF THE ACT. ASSESSEE SUBMITTED ITS REPLY AND CONTENDED AS UNDER: 1) BSE HAS INFORMED US THAT THEY ARE NOT ALLOWED TO RE VISE THEIR RETURN, SO AS TO CLAIM THE CREDIT OF THE TDS NOW DEMANDED. 2) PLEASE NOTE WE HAD NOT DEDUCTED ANY TAX AT SOURCE B ECAUSE OF THE FAVOURABLE JUDGMENT BY THE HONBLE ITAT, MUMBAI IN THE CASE OF KOTAK SECURITIES. 3) BSE HAS ALSO PAID THE DUE TAXES ON THE ABOVE TRANSA CTION CHARGES IN THEIR INCOME TAX RETURNS. THEREFORE THIS NOTICE TAN TAMOUNT TO COLLECTION OF ADDITIONAL TAXES AND SAME TAX ONCE AG AIN FORM US, ONLY AFTER THE JUDGMENT FROM HIGH COURT. 4. THE REPLY OF ASSESSEE WAS NOT ACCEPTED BY THE AO. A O CONCLUDED THAT THE EXPENSES ON ACCOUNT OF TRANSACTION CHARGES PAID TO BSE ARE IN THE NATURE OF TECHNICAL/MANAGERIAL SERVICES TO WHICH PROVISION OF SECTION 194A APPLIES. THE AO ON THE BASIS OF PAYMENT MADE ON ACCOUNT OF TRANS ACTION CHARGES TO BSE/NSE OF RS. 471819/-, CALCULATED TDS @ 10.30% OF RS. 48, 739/-. AO FURTHER CALCULATED INTEREST U/S 201(1A) OF THE ACT FROM 01. 04.2007 TO MARCH 2012 OF RS. 29,243/- IN ITS ORDER DATED 30.03.2012. AGGRIEVED B Y THE ORDER OF AO, THE ASSESSEE FILED APPEAL BEFORE CIT(A) BUT WITHOUT ANY SUCCESS. AGAINST THE SAID ORDER, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. 5. WE HAVE HEARD THE LD. AUTHORISED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR REVENUE. LD. A R OF THE ASSESSEE ARGUED THAT THE PRESENT CASE IS SQUARELY COVERED BY THE JU DGMENT OF HONBLE SUPREME COURT VIDE CIVIL APPEAL NO. 3141/2016 IN CASE TITLE D AS CIT VS. KOTAK SECURITIES LTD. DATED 29.03.2016. LD. DR FOR REVENUE FAIRLY AG REED THAT THE ISSUE RAISED IN THE PRESENT APPEAL ARE COVERED AGAINST THE REVENUE. 6. WE HAVE SEEN THE ORDER OF HONBLE APEX COURT. THE H ONBLE APEX COURT WHILE CONSIDERING THE IDENTICAL GROUNDS HELD AS UNDER: 10. FOR THE AFORESAID REASONS, WE HOLD THAT THE VI EW TAKEN BY THE BOMBAY HIGH COURT THAT THE TRANSACTION CHARGES PAID TO THE BOMBAY STOCK EXCHANGE BY ITS MEMBERS ARE FOR TECHNICAL SE RVICES RENDERED IS NOT AN APPROPRIATE VIEW. SUCH CHARGES, REALLY, ARE IN THE NATURE OF PAYMENTS MADE FOR FACILITIES PROVIDED BY THE STOCK EXCHANGE. NO TDS ON SUCH PAYMENTS WOULD, THEREFORE, BE DEDUCTIBLE UNDER SECTION 194J OF THE ACT. 3 ITA NOS.6647 TO 6650/M/2014- TRUSTED SHARES & INVES TMENTS LTD. 7. KEEPING IN VIEW THE ABOVE OBSERVATION OF THE HONBL E APEX COURT, THE APPEAL OF THE ASSESSEE IS ALLOWED AND THE ORDER PASSED BY AO/ ITO-TDS DATED 30.03.2012 AND CONFIRMED BY CIT(A) VIDE ORDER DATED 02.09.2014 IS QUASHED. NO ORDER AS TO COSTS. 8. IN ITA NOS. 6648 TO 6650/MUM/2014, THE IDENTICAL GR OUNDS OF APPEAL ARE RAISED, WE HAVE ALREADY ALLOWED ITA NO. 6647/MUM/2014 FOLLO WING THE JUDGMENT OF HONBLE APEX COURT IN KOTAK SECURITIES LTD.(SUPRA), HENCE, ALL THESE THREE APPEALS FILED BY ASSESSEE ARE ALSO ALLOWED. 9. IN THE RESULT, ALL APPEALS FILED BY ASSESSEE ARE AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON T HIS 30 TH MAY, 2016. SD/- SD/- ( SANJAY ARORA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 30/05/2016 S.K.PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/