M/s. Select Stock Brokers Ltd., CHENNAI v. ITO, CHENNAI

CO 99/CHNY/2010 | 2004-2005
Pronouncement Date: 20-01-2011 | Result: Dismissed

Appeal Details

RSA Number 9921723 RSA 2010
Assessee PAN AABCS0244A
Bench Chennai
Appeal Number CO 99/CHNY/2010
Duration Of Justice 4 month(s) 3 day(s)
Appellant M/s. Select Stock Brokers Ltd., CHENNAI
Respondent ITO, CHENNAI
Appeal Type Cross Objection
Pronouncement Date 20-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 20-01-2011
Date Of Final Hearing 18-01-2011
Next Hearing Date 18-01-2011
Assessment Year 2004-2005
Appeal Filed On 16-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI (BEFORE DR. O.K. NARAYANAN VICE PRESIDENT AND SHRI HARI OM MARATHA JUDICIAL MEMBER) ..... I.T.A. NO. 1244/MDS/2010 ASSESSMENT YEAR : 2004-05 THE INCOME TAX OFFICER COMPANY WARD I(1) CHENNAI - 600 034. (APPELLANT) V. M/S SELECT STOCK BROKERS LTD. (NOW KNOWN AS M/S DBFS SECURITIES LTD.) OLD NO.2-A NEW NO.5 WEST ROAD CIT NAGAR WEST CHENNAI-600 035. PAN : AABCS0244A (RESPONDENT) C.O. NO. 99/MDS/2010 (IN I.T.A. NO. 1244/MDS/2010) ASSESSMENT YEAR : 2004-05 M/S SELECT STOCK BROKERS LTD. (NOW KNOWN AS M/S DBFS SECURITIES LTD.) OLD NO.2-A NEW NO.5 WEST ROAD CIT NAGAR WEST CHENNAI-600 035. (CROSS OBJECTOR) V. THE INCOME TAX OFFICER COMPANY WARD I(1) CHENNAI - 600 034. (RESPONDENT) REVENUE BY: SHRI SHAJI P. JACOB ASSESSEE BY: SHRI G . SURESH O R D E R PER HARI OM MARATHA JUDICIAL MEMBER : THE APPEAL BY THE REVENUE AND CROSS OBJECTION BY TH E ASSESSEE ARE DIRECTED IN RELATION TO THE ORDER OF T HE LD. COMMISSIONER I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 2 OF INCOME TAX (APPEALS)-V CHENNAI DATED 4.5.2010 PERTAINING TO ASSESSMENT YEAR 2004-05. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE- COMPANY IS A SHARE BROKER WHO DOES ITS BUSINESS AS A MEMBER REGISTERED WITH NATIONAL STOCK EXCHANGE OF INDIA. FOR THIS YEAR RETURN OF INCOME WAS FILED ON 26.10.2004 ADMITTING A LOSS OF ` 8 92 673/- BUT THE ASSESSMENT WAS COMPLETED UNDER S ECTION 143(3) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) O N 29.12.2006 BY MAKING FOLLOWING ADDITIONS:- 1. DIFFERENCE ADDED BACK AS BROKERAGE RECEIVED NOT ADMITTED : ` 2 45 825/- 2. DIFFERENCE ADDED BACK AS BROKERAGE CHARGES EXCESS CLAIMED : ` 9 45 305/- 3. ADDITION ON ACCOUNT OF DISALLOWANCE OF BAD DEBT : ` 19 33 796/- 4. DEPRECIATION CLAIM DISALLOWED : ` 1 10 032/- 5. EXCESS CLAIM OF BROKERAGE NOT PROPERLY EXPLAINED : ` 11 40 848/- 6. INTEREST PAYMENT CLAIM DISALLOWED : ` 4 63 780/- 7. DISALLOWANCE OF OFFICE SHARING EXPENSES : ` 2 00 000/- 8. FURTHER THE APPEAL IS AGAINST THE LEVY OF INTER EST UNDER SECTION 234B ALSO. 3. AGGRIEVED THE ASSESSEE PREFERRED APPEAL AND GOT FURTHER RELIEF FROM CIT(APPEALS). AGAINST THE RELIEF GRANTED TO T HE ASSESSEE THE REVENUE HAS COME IN APPEAL. IN ITS CROSS OBJECTION THE ASSESSEE HAS SIMPLY SUPPORTED THE FINDINGS OF THE LD. CIT(AP PEALS) IN SO FAR AS THE IMPUGNED DELETIONS OBJECTED BY THE REVENUE ARE CONCERNED. I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 3 4. THE FIRST ISSUE RAISED IN THE REVENUES APPEAL V IDE GROUND NO.2 IS THAT THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF DIFFERENCE IN BROKERAGE RECEIPT OF ` 2 45 825/-. 5. THE FACTS OF THIS ISSUE ARE THAT IN THE LIST FUR NISHED BY THE ASSESSEE ON 18.12.2006 THE BROKERAGE HAS BEEN RECE IVED AS ` 1 99 73 537/- AS AGAINST ` 1 97 27 712/- SHOWN IN THE PROFIT AND LOSS ACCOUNT. THE A.O. HAS ADDED A DIFFERENCE IN BROKER AGE RECEIVED WHICH COMES TO ` 2 45 825/-. THE ASSESSEE OBJECTED TO THIS ADDITIO N ON THE REASONING THAT THE ASSESSEE HAD ASKED FOR TH E BREAK-UP DETAILS OF THE BROKERAGE RECEIVED ALONG WITH NAMES ADDRESSES AND PAN OF THE PARTIES TO WHOM HIGH AMOUNTS WERE PAID. THEREFORE THE STATEMENT FURNISHED TO THE A.O. WAS NOT A COMPLETE ONE. IT WAS ARGUED THAT CERTAIN AMOUNTS OF BROKERAGE WERE REVER SED IN THE ORDINARY COURSE OF BUSINESS BY PASSING REVERSE ENTR IES AND FINALLY THE BROKERAGE EARNED CAME TO ` 1 97 27 712/- AS DECLARED IN THE AUDITED PROFIT AND LOSS ACCOUNT. THE LD. CIT(APPEALS) HAS ACCEPTED THE ABOVE CONTENTION OF THE ASSESSEE BY STATING THAT TH E A.O. HAS SIMPLY IGNORED THIS EXPLANATION AND ADDED THE DIFFERENTIAL AMOUNTS. BEFORE THE CIT(APPEALS) THE ASSESSEE FILED ADDITIONAL EVI DENCE ON 5.12.2007 AND HENCE THE REMAND REPORT WAS CALLED F OR FROM THE A.O. VIDE LETTER DATED 5.12.2007 WHICH WAS REPLIED BY THE A.O. AFTER I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 4 INVESTIGATION ON 1.4.2008. THE REMAND REPORT WAS C ONFRONTED WITH THE ASSESSEE. THE ASSESSEE STILL MAINTAINED THAT T HE DIFFERENCE IN BROKERAGE RECEIPTS AS STATED ABOVE IS DUE TO THE RE VERSAL ENTRY WHICH IS A COMMON PRACTICE IN THIS LINE OF BUSINESS AND T HE SAME WAS MADE AT THE TIME OF FINALIZATION OF ACCOUNTS. IT WAS CL AIMED THAT THE FINAL AUDITED P&L ACCOUNT IS ONLY BINDING STATEMENT AS TH E EARLIER LIST PRODUCED WAS NOT AN EXHAUSTIVE ONE BECAUSE MANY TIM ES THE CUSTOMERS PLEADED FOR FURTHER REDUCTION IN BROKERAG E CHARGES AND AS A MATTER OF PRACTICE THE HAS TO BE ACCEDED TO. AF TER CONSIDERING THESE ARGUMENTS THE LD. CIT(APPEALS) DELETED THE I MPUGNED ADDITIONS. 6. BEFORE US SIMILAR ARGUMENTS WERE TAKEN FROM BOT H THE SIDES AS TAKEN BEFORE FIRST APPELLATE AUTHORITY. THE P&L AC COUNT IS ADMITTEDLY AUDITED DOCUMENT AND THE ASSESSEE HAS SHOWN THE BRO KERAGE RECEIPT AT ` 1 97 27 712/- IN IT. IN THE STATEMENT SUBMITTED D URING THE ASSESSMENT PROCEEDINGS THE A.O. HAD DEMANDED BREAK -UP DETAILS OF BROKERAGE RECEIVED WITH COMPLETE EXPLANATION AS STA TED ABOVE. REGARDING THE DIFFERENCE IT WAS STATED THAT A REVE RSAL ENTRY WAS PASSED AND FINALLY THE BROKERAGE ARRIVED AT AS BROK ERAGE RECEIPT HAS BEEN INCORPORATED IN THE P&L ACCOUNT WHICH STANDS A UDITED BY A DULY APPOINTED CHARTERED ACCOUNTANT. THE REVENUE DID NO T DENY THAT PASSING REVERSAL ENTRIES IS NOT A COMMON PRACTICE I N THE LINE OF THIS I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 5 BUSINESS. IN FACT THE ASSESSEE HAD PRODUCED LEDGE R ACCOUNT COPIES THAT IS WHY REMAND REPORT WAS CALLED FOR AND THE CI T(APPEALS) HAS RELIED ON THAT LEDGE ACCOUNT COPIES. THESE LEDGER ACCOUNT COPIES HAVE BEEN PRODUCED BEFORE US ALSO IN THE ASSESSEES PAPER-BOOK. THEREFORE WE DO NOT FIND ANY SUBSTANTIAL MERIT IN THIS GROUND AND HENCE THIS ISSUE IS DECIDED AGAINST THE REVENUE. 7. THE SECOND ISSUE RAISED IN THIS APPEAL IS REGARD ING DELETION OF ADDITION MADE ON ACCOUNT OF DIFFERENCE IN BROKERAGE CHARGES PAID. 8. THE FACTS OF THIS ISSUE ARE THAT THE ASSESSEE HA S SHOWN BROKERAGE CHARGES PAID AT ` 1 23 53 786/- IN ITS PROFIT AND LOSS ACCOUNT BUT DURING ASSESSMENT PROCEEDINGS AS PER LIST PRODUCED ON 18.12.2006 THE BROKERAGE CHARGES PAID HAVE BEEN SH OWN AT ` 1 14 08 481/-. THE ASSESSEE DISPUTED THIS ADDITION AND THE LD. CIT(APPEALS) HAS DELETED THE SAME. NOW THE REVENU E IS AGGRIEVED. IT HAS BEEN ARGUED THAT A DIFFERENCE OF ` 9 45 305/- WAS FOUND OUT IN THE DETAILS PRODUCED DURING ASSESSMENT PROCEEDINGS. IT HAS BEEN FURTHER ARGUED THAT THE SUBMISSION MADE BEFORE THE CIT(APPEALS) ON WHICH REMAND REPORT WAS CALLED DID NOT EXPLAIN THE DIFFERENCE. THE CASE OF THE ASSESSEE AS PUT FORTH BY THE LEARNED A. R. IS THAT THE BREAK-UP LIST FURNISHED BEFORE THE A.O. WAS NOT COM PLETE AND I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 6 COMPREHENSIVE BUT THE A.O. HAS RELIED ON THE SAME. THE LD. CIT(APPEALS) HAS OBSERVED IN THIS REGARD AS UNDER:- I HAVE CONSIDERED THE ARGUMENTS OF THE AUTHORIZED REPRESENTATIVE THAT THE LIST GIVEN TO THE ASSESSING OFFICER IS NOT A COMPLETE LIST OF BROKERAGE PAID. BUT THE BROKERA GE PAID AS APPEARING IN THE P&L A/C IS THE CORRECT AMOUNT. HE NCE I AM OF THE OPINION THAT THE GROUND OF THE APPELLANT IS ALL OWABLE. FURTHER RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF COMMISSIONER OF INCOME TAX VS. H.B.STOCK HOLDINGS L TD. ITA NO.328 OF 2008 (HIGH COURT OF DELHI) THE ASSES SING OFFICER. IS HEREBY DIRECTED TO DELETE THIS ADDITION OF RS.9 45 305/- . 9. AFTER CONSIDERING RIVAL SUBMISSIONS WHICH ARE ON SIMILAR LINE AS TAKEN BEFORE AUTHORITIES BELOW WE ARE CONVINCED TH AT THIS ADDITION IS ALSO NOT CALLED FOR WITH SIMILAR REASONING AS HAS B EEN GIVEN REGARDING THE FIRST ISSUE OF THIS APPEAL. WE ARE IN AGREEMEN T WITH THE FINDING OF THE LD. CIT(APPEALS) AND DO NOT FIND ANY FAULT HEN CE WE CANNOT ALLOW THIS ISSUE IN FAVOUR OF REVENUE. 10. THE NEXT ISSUE RELATES TO ADDITION MADE ON ACCO UNT OF DISALLOWANCE OF BAD DEBTS OF ` 19 33 796/-. 11. THE FACTS OF THIS ISSUE ARE THAT THE ASSESSING OFFICER DEALING WITH THIS ISSUE IN PARA 7 AT PAGE 2 OF HIS ORDER HA S NARRATED THE BAD DEBTS WRITTEN OFF WAS CALLED BY STATEMENT OF ACCOUN TS COPIES BUT CERTAIN PERSONS OUT OF THEM COULD NOT BE CONTACTED SO THE GENUINENESS OF THE CLAIM OF THE ASSESSEE COULD NOT BE VERIFIED. IT IS I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 7 ALSO STATED THAT SOME OF THE DEBTORS HAVE DENIED AN Y TRANSACTION WITH ASSESSEE-COMPANY AND HENCE THE A.O. HAS DISALLOWED THE ENTIRE CLAIM OF BAD DEBT. IN FIRST APPEAL THE LD. CIT(AP PEALS) HAS DELETED THE ADDITION SO MADE. NOW THE REVENUE IS AGGRIEVE D. 12. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFU LLY PERUSED THE ENTIRE RECORDS AVAILABLE BEFORE US. IT WAS ARGU ED BY THE LEARNED D.R. THAT IT IS THE DUTY OF THE ASSESSEE TO IDENTIF Y THE DEBTORS WHEREAS SOME OF THE DEBTORS HAVE REFUSED TO RECOGNIZE THE A SSESSEE AND EVEN THE DEBTS. AS PER LEARNED D.R. THE BAD DEBT IF INCURRED DURING THE COURSE OF BUSINESS OR BEING INCIDENTAL TO THE B ANK CAN BE ALLOWED UNDER SECTION 36(III) OF THE ACT IN CASE IT IS WRIT TEN OFF AS HAVING BECOME BAD IN ITS BOOKS OF ACCOUNTS. IT WAS ARGUED THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE EVEN THE DEBTS. THEREFORE THE DEBTS ARE NOT ALLOWABLE AS HAVING BECOME BAD. 13. ON THE OTHER HAND THE ASSESSEES REPRESENTATIV E HAS MENTIONED THE FOLLOWING REASONS IN RESPECT OF THE A SSESSEES CLAIM:- (A) THE PARTIES WHOSE ACCOUNTS HAVE BEEN WRITTEN OFF AS BAD DEBTS WERE CLIENTS/SUNDRY DEBTORS IN THE BOOKS OF ACCOUNTS OF THE ERSTWHILE COMPANY M/S SUJANS STOCKS LTD. THIS COMPANY WAS RENAMED AS M/S SELECT STOCK BROKER S LTD. (APPELLANT COMPANY) AFTER THE CHANGE IN THE MANAGEMENT. (B) THE A.O. HAS SOUGHT FOR CONFIRMATION OF DEBTS DUE F ROM PARTIES TO THE APPELLANT COMPANY (M/S SELECT STOCK BROKERS LTD.) I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 8 (C) THE ABOVE PARTIES HAVE DENIED THEIR DUES TO THE APP ELLANT COMPANY (M/S SELECT STOCK BROKERS LTD.) WITH MALAFI DE MOTIVES EVEN THOUGH A LEGAL NOTICE WAS SENT TO ALL CLIENTS/ SUNDRY DEBTORS INFORMING THE COMPANY NAME CHANGE CONSEQUENT TO THE CHANGE IN MANAGEMENT. (D) THE ASSESSING OFFICER HAS RELIED ON THE REPLIES STA TEMENTS MADE ON IMPROPER ENQUIRIES. THE ASSESSING OFFICER HAS NOT CONSIDERED THE STATEMENT OF ACCOUNTS (CONTAINING NS E SETTLEMENT BILL DETAILS ENTRIES OF DMAT SERVICE T AX CHEQUES) OF ALL THE PARTIES AND LETTER DATED 26.12. 2006. THE ASSESSING OFFICER HAS NOT FOUND THESE STATEMENT S FALSE. (E) THE EXPLANATION THAT THE PARTY M/S MARUTHI SHARES A ND FINANCIAL SERVICES HAVE CLOSED THEIR BUSINESS AND THEIR WHEREABOUTS ARE NOT KNOWN WAS NOT CONSIDERED BY TH E ASSESSING OFFICER. THE APPELLANT COMPANY HAS CITED KALYAN MEMORIAL & CHARITABLE TRUST VS. ACIT RANGE-I MORAR APPEAL NO.233 OF 20 06. THE ASSESSING OFFICER OUGHT TO HAVE CONSIDERED THE STATEMENT OF ACCOUNTS SUBMITTED BY THE APPELLANT COMPANY. THE A SSESSING OFFICER OUGHT TO HAVE VERIFIED THE STATEMENTS FOR I TS GENUINENESS BEFORE DISALLOWING THE BAD DEBTS. 14. THE LD. CIT(APPEALS) HAS OBSERVED IN HIS ORDER REGARDING THIS ISSUE AS UNDER:- 6.5 CONSIDERING THE SUBMISSIONS IT IS NOTED THAT T HE ASSESSMENT WAS COMPLETED ADDING A SUM OF RS.19 33 7 96/- TOWARDS BAD DSEBTS CLAIM MADE BY THE APPELLANT. TH E ASSESSING OFFICER HAS NOT VERIFIED THE VERACITY OF THE CLAIM. THE DEBTORS GAVE A REPLY THAT THEY NEVER OWE ANY LIABILITY TO M /S SELECT STOCK BROKERS LTD. FOR THIS THE AUTHORIZED REPRESENTATI VE OF THE APPELLANT GAVE AN EXPLANATION THAT ORIGINALLY THE APPELLANT COMPANY WAS NAMED AS M/S SUJANS STOCKS LTD. WHICH W AS TAKEN OVER BY THE DIRECTORS OF THE PRESENT APPELLANT COMP ANY AND THE NAME WAS CHANGED AS M/S SELECT STOCK BROKERS WHICH WAS DULY INCORPORATED UNDER ROC. THE ROC CERTIFICATE IS PRO DUCED BEFORE ME AND PLACED ON RECORD. I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 9 6.6 IN THIS REGARD THE APPELLANT FILED THE RELEVANT LE DGER COPIES BEFORE THE ASSESSING OFFICER. THE PARTY-WIS E BREAK-UP OF BAD DEBTS CLAIMED IS AS FOLLOWS:- NAME OF THE PARTY AMOUNT WRITTEN-OFF (I) L. SATHISH RS. 9 387/- (II) G. RAGUPATHY RS. 4 62 733/- (III) M/S MARUTHI SHARES AND FINANCIAL SERVICES RS. 11 65 025/- (IV) A. DHANALAKSHMI RS. 2 66 651/- TOTAL RS. 19 33 796/- 6.7 DUE TO CHANGE IN NAME AND MANAGEMENT THERE WAS SOME CONFUSION TO THE DEBTORS. THAT IS WHY THEY SAID TH EY DID NOT OWE ANY AMOUNT TO THE APPELLANT COMPANY. HENCE TH E AMOUNTS HAVE BECOME IRRECOVERABLE AND WRITTEN OFF AS BAD DE BTS. 6.8 I AM SATISFIED WITH THE ARGUMENTS OF THE AUTHOR IZED REPRESENTATIVE AND ALSO CONSIDERING THE DECISION IN THE CASE OF KALYAN MEMORIAL & CHARITABLE TRUST VS. ACIT RANGE- 1 MORAR. APPEAL NO.233 OF 2006 THE CLAIM OF BAD DEBTS AMOUN TING TO RS.19 33 796/- IS IN ORDER. I AM OF THE OPINION TH AT THIS GROUND OF THE APPELLANT IS ALLOWABLE. ALSO CONSIDERING TH E PROVISIONS OF SECTION 36(VII) THE BAD DEBTS WRITTEN OFF IS AN AL LOWABLE EXPENDITURE. HENCE THE ASSESSING OFFICER IS DIREC TED TO DELETE THIS ADDITION OF RS.19 33 796/- . 15. AFTER CONSIDERING RIVAL SUBMISSIONS WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS WRITTEN OFF THE DEBT AS BAD AS PER LAW AND THE REASONS GIVEN IN THE EXPLANATION TO OBJECTI ONS OF THE A.O. THAT HE COULD NOT VERIFY THE GENUINENESS OF SOME OF THE DEBTORS AND SOME OTHERS DENIED HAVING ANY TRANSACTION WITH THE ASSES SEE-COMPANY ARE SUFFICIENT TO EXPLANATION THE SAME. IN THE RESULT WE CONFIRM THE IMPUGNED DELETION. I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 10 16. THE NEXT ISSUE PERTAINS TO RESTRICTION OF DISAL LOWANCE OF EXCESS CLAIM OF BROKERAGE TO ` 1 55 318/- AS AGAINST THE DISALLOWANCE OF ` 11 40 848/- MADE BY THE ASSESSING OFFICER. 17. THE FACTS OF THIS GROUND ARE THAT THE A.O. DISA LLOWED A SUM OF ` 11 40 848/- BEING 10% OF THE TOTAL BROKERAGE REPORT ED BY THE ASSESSEE. BUT THE LD. CIT(APPEALS) HAS REDUCED TO ` 1 55 318/- BEING 10% OF ` 15 53 179/- WHICH IS THE BALANCE AMOUNT FOR WHICH CONFIRMATION HAD NOT BEEN SUBMITTED. 18. AFTER HEARING BOTH SIDES WE ARE OF THE OPINION THAT THE AD HOC DISALLOWANCE MADE BY THE A.O. WAS MADE BECAUSE OUT OF THE TOTAL BROKERAGE PAID ` 1 14 08 481/- CONFIRMATION FROM 19 PARTIES TOTALL ING TO ` 91 98 55 302/- AS AGAINST BROKERAGE CHARGES SHOWN AS ` 1 23 53 786/- IN THE P&L ACCOUNT WHICH COMES TO 80% AND THAT TOO ON SIMPLY BASIS. IN OUR CONSIDERED OPINION THE FI NDING OF THE LD. CIT(APPEALS) IN THIS REGARD IS CORRECT AND DOES NOT DESERVE ANY INTERFERENCE AT OUR END. CONSEQUENTLY WE CONFIRM THE ORDER OF THE LD. CIT(APPEALS) AND DISALLOW THE GROUND TAKEN BY THE R EVENUE. 19. THE NEXT ISSUE PERTAINS TO DELETION OF DISALLOW ANCE OF CLAIM OF INTEREST PAID AMOUNTING TO ` 4 63 780/-. I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 11 20. THE FACTS OF THIS ISSUE ARE THAT THE A.O. DISAL LOWED ` 4 63 780/- ON THE REASON THAT THIS IS INTEREST PAYMENT TO SEBI AND RELATES TO EARLIER YEARS. THE CASE OF THE ASSESSEE IS THAT TH IS INTEREST HAS ACCRUED AND ARISING IN THE CURRENT ASSESSMENT YEAR AS PER SUPREME COURT DECISION. THIS IS AN ALLOWABLE EXPENDITURE I N THIS YEAR. 21. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFU LLY PERUSED THE ENTIRE RECORDS AVAILABLE BEFORE US. IN FACT T HE HON'BLE SUPREME COURT HAS DIRECTED ALL THE MEMBERS OF THE STOCK EXC HANGE TO PAY THE INTEREST TO SEBI WITH RETROSPECTIVE EFFECT. AS PER THE SUPREME COURT DIRECTIONS THE ASSESSEE PAID INTEREST RELATING TO RELEVANT ASSESSMENT YEAR AND ALSO PREVIOUS THREE YEARS AND CLAIMED THES E AS ACCRUED TO RELEVANT ASSESSMENT YEAR. IN OUR CONSIDERED OPINIO N THIS IS THE CURRENT CLAIM OF THE ASSESSEE WHICH IS SUPPORTED BY THE DECISION OF THE TRIBUNALS DELHI BENCH IN THE CASE OF NATIONAL AGRICULTURAL CO- OPERATIVE FEDERATION OF INDIA LTD. V. JCIT REPORTED IN 122 ITD 24 (DELHI) WHEREIN IT HAS BEEN HELD THAT THE LIABILITY TO PAY INTEREST CRYSTALISED ONLY ON HIGH COURT PASSING DECREE AND A WARDING INTEREST. THERE WAS NO LIABILITY ON THE PART OF THE ASSESSEE TO PAY INTEREST AS ON LAST DATE OF RELEVANT/EARLIER ASSESSMENT YEAR. CONSEQUENTLY WE CONFIRM THIS ACTION OF THE CIT(APPEALS) AS WELL. I.T.A. NO. 1244/MDS/10 C.O. NO. 99/MDS/10 12 22. THE NEXT ISSUE PERTAINS TO RESTRICTION OF DISAL LOWANCE OF OFFICE SHARING EXPENSES TO ` 1 00 000/- AS AGAINST ` 2 00 000/- MADE BY THE ASSESSING OFFICER. IN FACT THE A.O. HAS MADE AD H OC DISALLOWANCE WHICH HAS BEEN REDUCED TO JUST HALF BY THE LD. CIT( APPEALS). THE CIT(APPEALS) HAS REDUCED THESE EXPENDITURES ON THE BASIS OF EVIDENCE PRODUCED BEFORE THE CIT(APPEALS) WHICH WAS SENT TO THE A.O. FOR HIS REMAND REPORT. WE DO NOT FIND ANY MER IT IN THIS GROUND OF THE REVENUE. 23. IN THE RESULT APPEAL OF THE REVENUE AS WELL AS CROSS OBJECTION OF THE ASSESSEE STAND DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 20 TH JANUARY 2011. SD/- SD/- (DR. O.K. NARAYANAN) (HARI OM MARATHA) VICE PRESIDENT JUDICIAL MEMBER CHENNAI DATED THE 20 TH JANUARY 2011. KRI . COPY FORWARDED TO: (1) ASSESSEE (2) ASSESSING OFFICER (3) CIT(A)-V CHENNAI-34 (4) CIT CHENNAI-III CHENNAI (5) D.R. (6) GUARD FILE