DCIT 4(2), MUMBAI v. SSM SECURITIES P. LTD, MUMBAI

ITA 4589/MUM/2009 | 2006-2007
Pronouncement Date: 14-05-2010 | Result: Dismissed

Appeal Details

RSA Number 458919914 RSA 2009
Assessee PAN AAFCS2452Q
Bench Mumbai
Appeal Number ITA 4589/MUM/2009
Duration Of Justice 9 month(s) 7 day(s)
Appellant DCIT 4(2), MUMBAI
Respondent SSM SECURITIES P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 14-05-2010
Assessment Year 2006-2007
Appeal Filed On 06-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I MUMBAI BEFORE SHRI. R.S. PADVEKAR (J.M.) AND SHRI. RAJENDR A SINGH (A.M.) ITA NO.4589/MUM/2009 ASSESSMENT YEAR : 2006-2007 DCIT 4(2) R.NO.642 6TH FLR. AAYAKAR BHAVAN M.K. RD. MUMBAI 400 020. VS. SSM SECURITIES P. LTD. 513 RAHEJA CENTRE 5 TH FLR. NARIMAN POINT MUMBAI 400 021. PAN AAFCS2452Q (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI VIKRAM GAUR (SR. A.R.) RESPONDENT BY : SHRI SUNIL HIRAWAT O R D E R PER R.S. PADVEKAR J.M. THIS APPEAL IS FILED BY THE REVENUE CHALLENGING TH E IMPUGNED ORDER OF THE LEARNED CIT(A)-IV MUMBAI DATED 11.05.2009 FOR THE ASSESSMENT YEAR 2006-2007. 2. THE LEARNED DR FOR THE REVENUE IS PRESENT. WE H AVE HEARD THE PARTIES. 3. THE FIRST ISSUE IS WHETHER VSAT LEASE LINE CHAR GES AND TRANSACTION CHARGES ARE PAID FOR PROFESSIONAL AND TECHNICAL SER VICES RENDERED BY THE EXCHANGE TO ITS MEMBERS AND HENCE THE ASSESSEE WAS NO OBLIGATION TO DEDUCT THE T.D.S. 4. WE HAVE HEARD THE PARTIES LEARNED COUNSEL FOR T HE ASSESSEE SUBMITTED THAT NOW THIS ISSUE IS COVERED IN FAVOUR OF THE ASS ESSEE BY THE DECISION OF THE TRIBUNAL IN THE CASE OF KOTAK SECURITIES LTD. VS. A CIT 124 TTJ 241 (MUM) / 24 DTR 440 (MUM). THE LEARNED COUNSEL ALSO RELIED ON DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF SKYCELL COMMUNICAT IONS LTD. & ANR VS. ITA NO.4589/MUM/2009 ASSESSMENT YEAR : 2006-2007 2 DCIT (251 ITR 53)(MAD). THE LEARNED D.R. FAVOURAB LY CONCERNED THAT ISSUE STANDS COVERED BY THE DECISION OF THE TRIBUNAL AS S UBMITTED BY THE LEARNED COUNSEL. 5. THE FACTS IN BRIEF ARE AS UNDER. THE ASSESSEE I S STOCK & SHARE BROKER. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY. IN THE ASSESSMENT PROCEEDING IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS CLAIMED THE DEDUCTION OF EXPENSES ON TRANSACTION CH ARGES AND LEASE LINE CHARGES AMOUNTING TO RS.44 25 227/- AND RS.58 884/- RESPECTIVELY WHICH WERE PAID TO STOCK EXCHANGE FOR PROVIDING THE SERVI CES. THE ASSESSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE SHOULD HAVE DE DUCTED THE TAX AT SOURCE ON THE SAID PAYMENT AS SERVICES WERE LIKE RENDERING TECHNICAL SERVICES AND THE ASSESSEE HAS NOT DEDUCTED THE TAX. THE ASSESS ING OFFICER DISALLOWED SAME U/S.40(A)(IA) OF THE ACT. NOW THIS ISSUE IS DECIDING IN FAVOUR OF ASSESSEE BY THE TRIBUNAL IN THE CASE OF KOTAK SECUR ITIES LTD. (SUPRA). WE THEREFORE CONFIRM THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE AND RESPECTIVE GROUNDS TAKEN BY THE REVENUE ARE DISMISS ED. 6. THE NEXT ISSUE IS DISALLOWANCE OF RS.2 97 703/-. THE ASSESSEE HAS DEBITED RS.2 97 703/- AS STOCK EXCHANGE EXPENSES WH ICH WERE ON ACCOUNT OF SHORT DELIVERY CHARGES FAILURE TO RAISE REQUISITE MARGIN MONEY NONE TIMELY DEPOSIT OF MARGIN MONEY ETC. THE ASSESSING OFFIC ER WAS OF THE OPINION THAT THE SAID PAYMENT WAS IN THE NATURE OF THE PENALTY. WE THEREFORE DISALLOW THE ENTIRE AMOUNT TREATING THE SAME AS PENALTY FOR INFRACTION OF LAW. THE LEARNED COUNSEL SUBMITTED THAT THIS ISSUE HAS ALREA DY BEEN DECIDED BY THE HONBLE ITAT MUMBAI IN THE CASE OF GOLDCREST CAPIT AL MARKETS LTD. VS. ITO IN ITA NOS.1240 & 1241/MUM/2006 DATED 21.01.2009 IN FAVOUR OF THE ASSESSEE. 7. THE LEARNED DR FAIRLY CONCEDED THAT THE ISSUE HA S BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE IN THE CASE OF G OLDCREST CAPITAL MARKETS LTD.( SUPRA ). IN THE CASE OF GOLDCREST CAPITAL MARKETS LTD.( SUPRA ) THE TRIBUNAL HAS HELD THAT NSE IS NOT A STATUTORY BODY ON PAR WI TH SEBI. THE FINES & PENALTIES LEVIED FOR VIOLATION ON ACCOUNT OF CERTAI N COMPLIANCE CAN NOT BE ITA NO.4589/MUM/2009 ASSESSMENT YEAR : 2006-2007 3 EQUATED WITH VIOLATION OF RULE OR LAW. WE THERE FORE RESPECTFULLY FOLLOWING THE DECISION OF THE ITAT IN THE CASE OF GOLDCREST C APITAL MARKETS LTD.(SUPRA) CONFIRMED THE ORDER OF THE LEARNED CIT(A) AND DISMI SS THE GROUND NO.3. 8. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON THIS DAY OF 14 TH MAY 2010. SD/- (RAJENDRA SINGH) (ACCOUNTANT MEMBER) SD/- (R.S. PADVEKAR) (JUDICIAL MEMBER) MUMBAI DATED 14 TH MAY 2010. JANHAVI 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 I MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI