KAYCEE FINANCIAL SERVICES LTD, V. DCIT 2(3),

MA 118/MUM/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1673 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-11-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 21-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B P K

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'A' BENCH, MUMBAI BEFORE SHRI B.R. MITTA, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER MA NO. 118/MUM/2013 (ARISING OUT OF ITA NO. 2068/MUM/2011) (ASSESSMENT YEAR: 2005-06) M/S. KAYCEE FINANCIAL SERVICES LTD. D C I T 4(3) (NOW AMALGAMATED TO KANTILAL CHHAGANLAL SECURITIES P. LTD.) 6 TH FLOOR, AAYAKAR BHAVAN 319/605, COMMERCE HOUSE VS. M.K. ROAD, MUMBAI 400020 N.M. ROAD, FORT, MUMBAI 400023 PAN AAACJ4197R APPLICANT RESPONDENT APPLICANT BY: SHRI APURVA SHAH RESPONDENT BY: SHRI B.P.K. PANDA DATE OF HEARING: 07.02.2014 DATE OF PRONOUNCEMENT: 12.02.2014 O R D E R PER B.R. MITTAL, J.M. BY THIS MISCELLANEOUS APPLICATION THE ASSESSEE HAS STATED THAT THERE IS A MISTAKE IN THE ORDER OF THE TRIBUNAL DATED 20 TH FEBRUARY, 2013 IN ITA NO. 2068/MUM/2011 FOR A.Y. 2005-06 AND, THEREFORE, THE SAID ORDER MAY BE RECTIFIED BY RECALLING THE SAME. 2. AT THE TIME OF HEARING THE LEARNED A.R. SUBMITTED T HAT THE TRIBUNAL DECIDED THE APPEAL EXPARTE AND REVERSED THE ORDER O F THE CIT(A) IN RESPECT OF THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT ON ACCOUNT OF TRANSACTIONS CHARGES PAID TO THE STOCK EXCHANGE BY PLACING RELIANCE ON THE ORDER OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KOTAK SECURITIES LTD. 340 ITR 333(BOM). HE SUBMITTED THAT THE HON'BLE HIGH COURT HAS HELD THAT NO DISALLOWANCE OUGHT TO BE MADE UNDE R SECTION 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TDS. THE LEARNED A.R. REITERATED THE ABOVE CONTENTS OF THE APPLICATION IN HIS SUBMISSIONS. MA NO. 118/MUM/2013 M/S. KAYCEE FINANCIAL SERVICES LTD. 2 3. HOWEVER, THE LEARNED D.R. SUBMITTED THAT THE TRIBUN AL HAS PASSED A CONSCIOUS DECISION AFTER CONSIDERING THE JUDGEMEN T OF THE HON'BLE BOMBAY HIGH COURT. HE SUBMITTED THAT THE HON'BLE BO MBAY HIGH COURT HAS HELD THAT TDS IS REQUIRED TO BE DEDUCTED IN RES PECT OF TRANSACTION CHARGES PAID TO THE STOCK EXCHANGE AND IF TDS IS NO T DEDUCTED DISALLOWANCE UNDER SECTION 40(A)(IA) IS TO BE MADE AS PER THE AMENDMENT MADE BY THE FINANCE ACT, 2004 W.E.F. 1 ST APRIL, 2005, WHICH IS APPLICABLE FROM A.Y. 2005-06. HE SUBMITTED THAT THE HON'BLE BO MBAY HIGH COURT HAS ALSO HELD THAT IN VIEW OF THE PECULIAR FACTS OF THE SAID CASE WHERE BOTH REVENUE AND ASSESSEE, RIGHT FROM THE INSERTION OF SECTION 194J IN THE YEAR 1995 TILL 2005, PROCEEDED ON THE FOOTING T HAT THE ASSESSEE WAS NOT LIABLE TO DEDUCT TDS AND IN FACT IMMEDIATELY AF TER A.Y. 2005-06, ASSESSEE HAD BEEN DEDUCTING TAX AT SOURCE WHILE CRE DITING TRANSACTION CHARGES TO THE ACCOUNT OF THE STOCK EXCHANGE. HE SU BMITTED THAT NO SUCH FACT WAS BROUGHT ON RECORD BY THE ASSESSEE IN THE PRESENT CASE. HE SUBMITTED THAT IF THE ABOVE ORDER IS RECALLED IT WI LL AMOUNT TO REVIEW OF THE ORDER PASSED BY THE TRIBUNAL AS THERE IS NO APP ARENT MISTAKE IN THE ORDER OF THE TRIBUNAL. 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE PARTIES AND ORDER OF THE HON 'BLE BOMBAY HIGH COURT (SUPRA) AND ALSO THE IMPUGNED ORDER OF THE TRIBUNAL DATED 20 TH FEBRUARY, 2013. WE AGREE WITH THE LEARNED D.R. THAT THE TRIBU NAL HAS DECIDED THE ISSUE AS PER THE PROVISIONS OF THE ACT THAT THE ASS ESSEE IS REQUIRED TO DEDUCT TDS IN RESPECT OF THE TRANSACTION CHARGES PAID BY T HE ASSESSEE TO THE STOCK EXCHANGE FOR TRADING THROUGH BOLT SYSTEM UNDER SECT ION 194J OF THE ACT AND IF NO TDS IS DEDUCTED WHILE CREDITING THE TRANS ACTION CHARGES TO THE ACCOUNT OF THE STOCK EXCHANGE, IN VIEW OF THE AMEND MENT MADE BY FINANCE ACT (2), 2004 APPLICABLE FROM A.Y. 2005-06, THE AMO UNT CLAIMED HAS TO BE DISALLOWED AS PER SECTION 40(A)(IA) OF THE ACT. SIN CE THE TRIBUNAL HAS DECIDED THE ISSUE AS PER LAW, WHICH WAS ALSO ACCEPTED BY TH E LEARNED A.R., WE DO NOT FIND ANY REASON TO RECALL THE ORDER OF THE TRIBUNAL AS IT DOES NOT CONTAIN ANY APPARENT MISTAKE. MA NO. 118/MUM/2013 M/S. KAYCEE FINANCIAL SERVICES LTD. 3 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH FEBRUARY, 2014. SD/- SD/- (SANJAY ARORA) (B.R. MITTAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 12 TH FEBRUARY, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 10, MUMBAI 4. THE CIT 4, MUMBAI CITY 5. THE DR, A BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.