ACIT 4(3), MUMBAI v. SETU SECURITIES LTD, MUMBAI

ITA 3224/MUM/2009 | 2005-2006
Pronouncement Date: 13-04-2010 | Result: Dismissed

Appeal Details

RSA Number 322419914 RSA 2009
Assessee PAN AAGCS9319K
Bench Mumbai
Appeal Number ITA 3224/MUM/2009
Duration Of Justice 10 month(s) 29 day(s)
Appellant ACIT 4(3), MUMBAI
Respondent SETU SECURITIES LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 13-04-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 13-04-2010
Assessment Year 2005-2006
Appeal Filed On 15-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI. BEFORE SHRI S.V.MEHROTRA AM & SMT ASHA VIJAYRAGHA VAN JM I.T.A. NO.3224/MUM/2009 ASSESSMENT YEAR: 2005-06 THE ACIT 4(3) V. SETU SECURITIES LTD. AAYAKAR BHAVAN M.K. ROAD 502 SHREYAS APA RTMENT 51 T.P.S. MUMBAI. ` ROAD BORIVALI (W) MUMBAI. PA NO.AAGCS 9319 K (APPELLANT) (RESPONDENT) ASSESSEE BY: MEENA H.SHAH REVENUE BY : SHRI S.K.MOHAPATRA O R D E R PER S.V.MEHROTRA AM THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 3 RD MARCH 2009 OF LD CIT (A)-XV MUMBAI DELETING THE DISALL OWANCE MADE IN RESPECT OF VSAT/LEASELINE AND TRANSACTION CHARGES FOR THE ASS ESSMENT YEAR 2005-06. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IN THE RELEVANT ASSESSMENT YEAR WAS ENGAGED IN THE BUSINESS OF SUB-BROKING IN SHARE S & SECURITIES. THE AO DISALLOWED THE TRANSACTION CHARGES AMOUNTING TO RS.4 56 306.02 PAID TO STOCK EXCHANGES (BSE/NSE) VSAT AND LEASELINE CHARGES OF RS.1 42 62 8/- ON THE GROUND THAT TAX HAD NOT BEEN DEDUCTED TREATING THE SAME AS TECHNICAL SERVIC ES. ON APPEAL LD CIT (A) FOLLOWING THE DECISION OF THE ITAT MUMBAI IN THE CASE OF KOTA K SECURITIES V ACIT IN ITA NO .1955/M/07 DELETED THE ADDITION. BEING AGGRIEV ED THE REVENUE IS IN APPEAL BEFORE US. 3. HAVING HEARD BOTH THE SIDES WE FIND THAT THIS I SSUE IS COVERED BY THE DECISION OF THE ITAT MUMBAI IN THE CASE OF KOTAK SECURITIES LTD V. ACIT 24 DTR 214(MUM) WHEREIN IT WAS HELD AS UNDER:- ITA NO.3224/M/2009 M/S. SETU SECURITIES LTD 2 THE TRANSACTION FEE IS NOT PAID IN CONSIDERATION OF ANY SERVICE PROVIDED BY THE STOCK EXCHANGE. IT IS A PAYMENT FOR USE OF FACILITIES PROVIDED BY THE STOCK EXCHANGE AND SUCH FACILITIES ARE AVAILABLE FO R USE BY ANY MEMBER. THE PROVISIONS OF S.194J WHICH CASTS A BURDEN ON A PERSON TO DEDUCT AT SOURCE AND TREAT HIM A DEFAULTER ON FAILURE TO DEDU CT TAX AT SOURCE NEEDS TO BE INTERPRETED STRICTLY AND IN THE ABSENCE OF A CLEAR OBLIGATION ON THE PART OF A PERSON SPELT OUT IN UNAMBIGUOUS TERMS BY THE PROVISIONS OF S.194J R/W EXPLN. 2 TO S.9(1)(VII) OF THE ACT SUCH OBLIGATION CANNOT BE IMPLIED OR LEFT TO THE IPSI DIXIT OF THE REVENUE AU THORITIES. WE THEREFORE HOLD THAT TRANSACTION FEE PAID CANNOT BE SAID TO BE A FEE PAID IN CONSIDERATION OF THE STOCK EXCHANGE RENDERING ANY T ECHNICAL SERVICES TO THE ASSESSEE. THE PROVISIONS OF S.194J ARE THEREF ORE NOT ATTRACTED. THEREFORE THERE WAS NO OBLIGATION ON THE PART OF T HE ASSESSEE TO DEDUCT TAX AT SOURCE. CONSEQUENTLY THE PROVISIONS OF SEC TION 30(A)(IA) WERE ALSO NOT ATTRACTED AND THEREFORE THE DISALLOWANCE MADE IS DIRECTED TO BE DELETED. RESPECTFULLY FOLLOWING THE DECISION OF A CO-ORDINA TE BENCH OF THE TRIBUNAL IN THE CASE OF KOTAK SECURITIES LTD (SUPRA) WE REJECT THE GROUND TAKEN BY THE REVENUE. 4. IN THE RESULT APPEAL FILED BY THE REVENUE STAND S DISMISSED. PRONOUNCED ON 13 TH APRIL 2010 SD/- (ASHA VIJAYRAGHAVAN) (JUDICIAL MEMBER) SD/- (S.V. MEHROTRA) (ACCOUNTANTMEMBER) MUMBAI DATED 13 TH APRIL 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- MUMBAI 4. COMMISSIONER OF INCOME TAX CITY- MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH E MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI ITA NO.3224/M/2009 M/S. SETU SECURITIES LTD 3 DATE INITIALS 1. DRAFT DICTATED ON 12.4.2010 PS 2. DRAFT PLACED BEFORE AUTHOR 12.4.2010 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER ITA NO.3224/M/2009 M/S. SETU SECURITIES LTD 4