M/S. UTI SECURITIES LTD ( NOW KNOWN AS STANDARD CHARTERED- STCI CAPITAL MARKES LTD ), MUMBAI v. THE ACIT RG 4(2), MUMBAI

ITA 3006/MUM/2008 | 2004-2005
Pronouncement Date: 28-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 300619914 RSA 2008
Assessee PAN THJAN2011I
Bench Mumbai
Appeal Number ITA 3006/MUM/2008
Duration Of Justice 2 year(s) 8 month(s) 23 day(s)
Appellant M/S. UTI SECURITIES LTD ( NOW KNOWN AS STANDARD CHARTERED- STCI CAPITAL MARKES LTD ), MUMBAI
Respondent THE ACIT RG 4(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 28-01-2011
Date Of Final Hearing 17-01-2011
Next Hearing Date 17-01-2011
Assessment Year 2004-2005
Appeal Filed On 05-05-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI S V MEHROTRA ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO JUDICIAL MEMBER ITA NO. 3006/MUM/2008 (ASSESSMENT YEAR 2004-05) UTI SECURITIES LTD. (NOW KNOWN AS STANDARD CHARTERED- STCI CAPITAL MARKETS LTD) DHEERAJ ARMA 1 FLOOR ANANT KANEKAR MARG BANDRA (E) MUMBAI-400051 . APPELLANT VS THE ACIT RANGE-4(2) ROOM NO.669 6 TH FL. AAYAKAR BHAVAN NEW MARINE LINES MUMBAI-400020 RESPONDENT APPELLANT BY : SHRI NITESH JOSHI RESPONDENT BY : SHRI ABAMNI KANT A NAYAK O R D E R PER VIJAY PAL RAO JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 03.03.2008 OF THE CIT(A) FOR THE ASSES SMENT YEAR 2004-05. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: ITA NO. 3006/MUM/2008 (ASSESSMENT YEAR 2004-05) 2 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE AO ON THE FOLLOWING ITEMS WHIL E COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE IT ACT 1961 S.NO. DETAILS AMOUNT RS. 1.1 WRITE OFF BALANCES DUE FROM DIFFERENT PARTIES 26 37 759 1.2 EXPENDITURE IN RELATION TO EXEMPTED INCOME U/S14A OF THE IT ACT 1961 14 80 000 41 17 759 3. THE FIRST GROUNDS OF APPEAL IS REGARDING WRITTEN OFF THE BALANCES DUE FROM THE DIFFERENT PARTIES. THE ASSESS EE CLAIMED BOTH WRITTEN OFF AMOUNTS OF RS.26 37 759/- PERTAINS TO ACCOUNTS OF THE CLIENTS. THE AO DISALLOWED THE CLA IM OF THE ASSESSEE ON THE GROUNDS THAT THE CONDITIONS LAID DO WN UNDER THE PROVISIONS OF SECTION 36(1)(VII) AND 36(2) ARE NOT SATISFIED. 4. ON APPEAL THE CIT(A) HAS ALSO DIRECTED THE AO TO VERIFY THE AMOUNT OF CLAIM WITH RESPECT TO EACH PARTY WHI CH HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE TOTAL INCO ME OF THE ASSESSEE IN ANY OF PREVIOUS YEAR AND IF SO SUCH AMO UNT SHALL BE ALLOWED AS BAD DEBTS. 5. BEFORE US THE LEARNED AR OF THE ASSESSEE HAS SU BMITTED THAT THIS IS COVERED BY THE DECISION OF SPECIAL BE NCH OF THE TRIBUNAL IN THE CASE OF JCIT V/S SHREYAS S MORAKHIA REPORTED ITA NO. 3006/MUM/2008 (ASSESSMENT YEAR 2004-05) 3 IN 40 SOT 42 = 5 ITR (AT) 01. THE LEARNED AR HAS P OINTED OUT THAT THE CIT(A) HAS DIRECTED THE AO WHETHER TH E ENTIRE OUTSTANDING AMOUNT AGAINST THE CLIENTS HAS BEEN AC COUNTED FOR HAS BEEN TAKEN INTO ACCOUNT WHILE COMPUTING THE TOTAL INCOME. WHEREAS AS PER THE DECISION OF THE SPECIAL BENCH THE BROKERAGE CHARGES IN RESPECT OF THESE CLIENTS IS RE QUIRED TO BE TAKEN INTO ACCOUNT. THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT THIS ISSUE ALSO STANDS COVERED BY TH E DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE AS SESSMENT YEAR 2003-04 IN ITA NO.4316/MUMBAI/ ORDER DATED 9. 09.2010. 6. ON THE OTHER HAND THE LEARNED DR HAS SUBMITTED THAT THE FACTS ARE REQUIRED TO BE VERIFIED BY THE AO AN D RELIED UPON THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND REL EVANT RECORD. AT THE OUTSET WE NOTE THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE SPECIAL BENCH OF T HE TRIBUNAL IN THE CASE OF JCIT V/S SHREYAS S MORAKHIA (SUPRA). THIS TRIBUNAL HAS ALSO FOLLOWED THE SAID DECISION WHILE DECIDING THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003 -04 (SUPRA). ACCORDINGLY WE REMIT THIS ISSUE TO THE R ECORD OF THE AO TO DECIDE THE SAME IN ACCORDANCE WITH THE DECISI ON OF THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF JCI T V/S ITA NO. 3006/MUM/2008 (ASSESSMENT YEAR 2004-05) 4 SHREYAS S MORAKHIA (SUPRA) AND TO VERIFY WHETHER THE BROKERAGE CHARGES IN RESPECT OF THESE PARTIES HAVE BEEN TAKEN INTO ACCOUNT FOR COMPUTING THE TOTAL INCOME IN THE PREVIOUS YEAR AS WELL AS OTHER CONDITIONS PRESCRIBED IN THE ORDER OF THE SPECIAL BENCH. ACCORDINGLY THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES. 8. THE SECOND GROUNDS OF APPEAL IS REGARDING DISALL OWANCE OF EXPENDITURE EXEMPT U/S 14A. 9. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEAR NED DR. BOTH THE PARTIES HAVE FAIRLY AGREED THAT THIS ISSUE IS REQUIRED TO BE EXAMINED BY THE AO IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF GODRE J AND BOYCE MANUFACTURING CO. LTD MUMBAI REPORTED IN 234 CTR (BOM)-1 AND 328 ITR 81. ACCORDINGLY WE REMIT THIS ISSUE T O THE RECORD OF THE AO TO VERIFY THE FACTS IN THE LIGHT OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE CITED SUPRA. 10. THE APPEAL OF THE ASSESSEE IS PART ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.01.2011 SD SD (S V MEHROTRA ) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 28 TH JAN 2011 ITA NO. 3006/MUM/2008 (ASSESSMENT YEAR 2004-05) 5 SRL:25111 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI