SHCIL SERVICES LTD., MUMBAI V. ACIT - RANGE 4(2), MUMBAI

MA 106/MUM/2016

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5252 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AKRAM KHAN MR RAUNAK VARDHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) M.A. NO. 106/MUM/2016 (ARISING OUT OF ITA NO. 1221/MUM/2011) ASSESSMENT YEAR: 2007-08 M/S. SHCIL SERVICES LTD. VS. ASST CIT CIR 4(2) 12/14, UTI BUILDING, BANK AAYAKAR BHAVAN, STREET, CROSS LANE, NEAR OLD M.K. MARG, CUSTOM HOUSE, FORT LANE, MUMBAI MUMBAI 400023 PAN NO. AAJCS5661H (APPELLANT) (RESPONDENT) ASSESSEE BY : MR. AKRAM KHAN / MR. RAUNAK VARDHAN, AR REVENUE BY: MR. JITENDRA KUMAR, DR DATE OF HEARING : 20/01 /2017 DATE OF PRONOUNCEMENT: 30/01/2017 ORDER PER N.K. PRADHAN, AM BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE HA S SOUGHT FOR RECTIFICATION /RECALL OF THE ORDER OF THE TRIBUNAL DATED 28.08.2014 IN ITA NO. 1221/MUM/2011. BY THE SAID ORDER, THE ITAT H BENCH MUMBAI HAS FOLLOWED THE JUDGEMENT OF THE HON'BLE BO MBAY HIGH COURT IN THE CASE OF CIT VS. KOTAK SECURITIES LTD . 340 ITR 333 (BOM) AND ALLOWED THE GROUND OF APPEAL OF THE REVENUE AND HELD THAT TDS IS REQUIRED TO DEDUCTED ON THE TRANSACTION CHARGES PAI D TO BSE. THEREBY, THE TRIBUNAL CONFIRMED THE DISALLOWANCE OF TRANSACTION CHARGES U/S 40(A)(IA) OF THE ACT. 2. THE LEARNED COUNSELS OF THE ASSESSEE SUBMIT THAT THE JUDGEMENT OF THE BOMBAY HIGH COURT IN THE CASE OF KOTAK SECURITIES LTD. HAS NOW BEEN REVERSED BY THE SUPREME COURT VIDE ITS JUDGEME NT DATED MA NO. 106/MUM/2016 2 29.03.2016 REPORTED IN 67 TAXMANN.COM 356. THEY SUB MIT THAT THE ABOVE DECISION OF THE HON'BLE SUPREME COURT CONSTIT UTES A MISTAKE APPARENT FROM RECORD AND REQUEST THE TRIBUNAL FOR R ECTIFICATION / RECALL OF PARAGRAPH 7 OF THE ORDER DATED 28.08.2014 ON THE ISSUE OF DISALLOWANCE OF TRANSACTION CHARGES MADE U/S 40(A)( IA) OF THE ACT IN THE SUM OF RS. 5,56,865/-. 4. NO OBJECTION WAS TAKEN BY THE LEARNED DR. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE CASE OF KOTAK SECURITIES LTD ., THE HON'BLE SUPREME COURT HAS HELD AS UNDER: FOR THE AFORESAID REASONS, WE HOLD THAT THE VIEW TA KEN BY THE BOMBAY HIGH COURT THAT THE TRANSACTION CHARGES PAID TO THE BOMBA Y STOCK EXCHANGE BY ITS MEMBERS ARE FOR TECHNICAL SERVICES 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, T HEREFORE, BE DEDUCTIBLE UNDER SECTION 194J OF THE ACT. IN VIEW OF ABOVE CONCLUSIONS, IT WILL NOT BE NECES SARY FOR US EXAMINE THE CORRECTNESS OF THE VIEW TAKEN BY THE BOMBAY HIGH CO URT WITH REGARD TO THE ISSUE OF THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. ALL THE APPEALS, THEREFORE, SHALL STAND DISPOSED IN THE LIGHT OF OUR VIEWS AND OBSERVATIONS AS INDICATED ABOVE. 5.1 WE FIND THAT IT WOULD BE PROPER TO EXAMINE THE APPLICABILITY OF THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE C ASE OF KOTAK SECURITIES LTD . TO THE INSTANT CASE. THEREFORE, WE RECALL THE ORD ER IN ITA NO. 1221/MUM/2011. REGISTRY IS DIRECTED TO FIX THE CASE FOR HEARING. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/01/2017 SD/- SD/- (C.N. PRASAD) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED: 30/01/2017 BISWAJIT, SR. P.S. MA NO. 106/MUM/2016 3 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