ITO 4(2)(1), V. YOKE SECURITIES P. LTD,

MA 145/MUM/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9081 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-08-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2007-2008
• Appeal Filed On: 06-03-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order; Bonafide belief; Reason to believe

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER & SHRI VIVEK VARMA, JUDICIAL MEMBER. M.A. NO. 145/MUM/2012 (IN ITA NO. 5846/MUM/2010) ASSESSMEN T YEAR : 2007-08. THE INCOME-TAX OFFICER, M/S YOKE SECURITIES PVT. LTD. 4(2)(1), MUMBAI. VS. YOKE ARCADE, 5 TH FLOOR, ROOM NO. 502-503, BHAWANI SHANKAR ROAD, DADA R, MUMBAI 400 028. PAN AAACY1278R APPLICANT. RESPONDENT. APPLICANT BY : SHRI RAJARSHI DWIVEDY. RESPON DENT BY : SHRI VIJAY MEHTA. DATE OF HEARING : 10-08-2012. DATE OF PRON OUNCEMENT : 29-08-2012. O R D E R. PER P.M. JAGTAP, A.M. : BY THIS MISCELLANEOUS APPLICATION, THE REVENUE IS SEEKING RECTIFICATION OF MISTAKE ALLEGED TO HAVE CREPT IN THE ORDER OF THE T RIBUNAL DATED 30 TH SEPT., 2011 PASSED IN ITA NO.5846/MUM/2010. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IN THIS CASE, ONE OF THE ISSUE S RAISED BY THE REVENUE IN ITS APPEAL RELATING TO DISALLOWANCE OF RS.14,18,763/- O N ACCOUNT OF TRANSACTION CHARGES PAID TO STOCK EXCHANGE U/S 40(A)(IA) WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE 2 M.A.NO.145/MUM/2012 ASSESSEE AND AGAINST THE REVENUE BY AN ORDER DATED 30 TH SEPT., 2011 (SUPRA) FOLLOWING THE DECISION OF THE COORDINATE BENCH IN THE CASE OF KOTAK SECURITIES LTD. VS. ACIT 313 ITR (AT) 268. AS SUBMITTED BY THE REVE NUE IN THE PRESENT APPLICATION, THE SAID DECISION OF THE TRIBUNAL IN T HE CASE OF KOTAK SECURITIES LTD. (SUPRA) HAS BEEN SUBSEQUENTLY OVERRULED BY THE HON BLE BOMBAY HIGH COURT VIDE ITS JUDGEMENT DATED OCT., 21, 2011 PASSED IN ITA NO . 3111 OF 2009 HOLDING THAT THE TRANSACTION CHARGES BEING LEVIED BY THE STOCK E XCHANGE FOR RENDERING MANAGERIAL SERVICES TO THE STOCK BROKERS, TAX AT SO URCE WAS LIABLE TO BE DEDUCTED BY THE STOCK BROKERS FROM THE AMOUNT OF TRANSACTION C HARGES PAID TO THE STOCK EXCHANGE AS PER THE PROVISIONS OF SECTION 194J. THE DECISION RENDERED BY THE TRIBUNAL ON THIS ISSUE VIDE ITS ORDER DATED 30 TH SEPT., 2011 THUS IS CONTRARY TO THE SUBSEQUENT DECISION OF HONBLE JURISDICTIONAL HIGH COURT AND TO THAT EXTENT THERE IS A MISTAKE IN THE ORDER OF THE TRIBUNAL WHICH IS APP ARENT FROM RECORD. HOWEVER, AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE DECISION OF THE TRIBUNAL DELETING THE DISALLOWANCE MADE BY THE AO ON ACCOUNT OF TRANSACTION CHARGES U/S 40(A)(IA) HAS BEEN FINALLY UPHELD BY THE HONBLE HI GH COURT IN THE CASE OF KOTAK SECURITIES LTD. (SUPRA) ON THE GROUND THAT THE ASSE SSEE HAD A BONAFIDE REASON TO BELIEVE THAT THE TAX WAS NOT DEDUCTIBLE AT SOURCE F ROM THE PAYMENT OF TRANSACTION CHARGES AND THE AO, THEREFORE, WAS NOT JUSTIFIED IN DISALLOWING THE TRANSACTION CHARGES BY INVOKING SECTION 40(A)(IA). HE HAS CONTE NDED THAT THE ASSESSEE IN THE PRESENT CASE ALSO HAD SUCH BONAFIDE BELIEF AND OPPO RTUNITY MAY, THEREFORE, BE GIVEN TO THE ASSESSEE TO ESTABLISH SUCH BONAFIDE BELIEF B EFORE THE AO. 3. KEEPING IN VIEW THE ABOVE SUBMISSION, WE RECTIFY THE ORDER OF THE TRIBUNAL DATED 30 TH SEPT., 2011 BY RESTORING THE ISSUE RELATING TO DIS ALLOWANCE OF TRANSACTION CHARGES U/S 40(A)(IA) TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE SAME AFRESH IN THE LIGHT OF THE DECISION OF HONBLE BOMB AY HIGH COURT IN THE CASE OF 3 M.A.NO.145/MUM/2012 KOTAK SECURITIES LTD. (SUPRA) AFTER GIVING THE ASSE SSEE AN OPPORTUNITY TO ESTABLISH THE BONAFIDE BELIEF. 4. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE REVENUE IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF AUGUST, 2012. SD/- SD/- (VIVEK VARMA) (P.M. JAGTAP) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI, DATED: 29 TH AUGUST, 2012. COPY TO : 1. APPLICANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, G-BENCH. (TRUE COPY) BY ORD ER ASSTT. R EGISTRAR, ITAT, MUMBAI BEN CHES, MUMBA I. WAKODE