ITO 4(2)(1), MUMBAI v. YOKE SECURITIES, MUMBAI

ITA 5846/MUM/2010 | 2007-2008
Pronouncement Date: 30-09-2011 | Result: Dismissed

Appeal Details

RSA Number 584619914 RSA 2010
Assessee PAN AAACY1278R
Bench Mumbai
Appeal Number ITA 5846/MUM/2010
Duration Of Justice 1 year(s) 2 month(s) 9 day(s)
Appellant ITO 4(2)(1), MUMBAI
Respondent YOKE SECURITIES, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 30-09-2011
Assessment Year 2007-2008
Appeal Filed On 21-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G BEFORE SHRI P.M. JAGTAP (A.M) AND SHRI R.S. PADVEKA R (JM) ITA NO.5846/MUM/2010 (ASSESSMENT YEAR 2007-08) I.T.O. 4(2)(1) 6 TH FL. R. NO. 647 AAYAKAR BHAWAN MUMBAI 20. VS. M/S . YOKE SECURIT IES PVT. LTD. YOKE ARCADE 5 TH FLOOR ROOM NO. 502-503 BHAWANI SHANKAR ROAD DADAR MUMBAI. 28 PAN AAACY1278R APPELLANT RESPONDENT APPELLANT BY S HRI A.K. NAYAK RESPONDENT BY SHRI VIJAY MEHTA DATE OF HEARING : 20.09.20 10 DATE OF PRONOUNCEMENT : ORDER PER P.M. JAGTAP A.M. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 8 MUMBAI DATE D 11.05.2010 WHEREBY HE DELETED THE DISALLOWANCE OF RS.3 97 976/- MADE BY T HE A.O. ON ACCOUNT OF V. SAT & LEASELINE CHARGES AND OF RS.14 18 763/- ON ACCOU NT OF TRANSACTION CHARGES BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA). 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF SHARE BROKING AND SHARE TRADING. THE R ETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 31.10.07 DEC LARING A TOTAL INCOME OF RS.1 60 89 843/-. IN THE P&L ACCOUNT FILED ALONG W ITH THE SAID RETURN THE AMOUNT PAID TO STOCK EXCHANGE ON ACCOUNT OF V. SAT & LEASELINE CHARGES AMOUNTING TO RS.3 97 976/- AND ON ACCOUNT OF TRANS ACTION CHARGES AMOUNTING TO RS.14 18 763/- WAS DEBITED BY THE ASSESSEE COMPANY. ACCORDING TO THE A.O. ITA 5846/MUM/10 2 THE SAID CHARGES PAID BY THE ASSESSEE TO THE STOCK EXCHANGE WERE FOR SUCH SERVICES WHICH WERE IN THE NATURE OF TECHNICAL AND MANAGERIAL. HE THEREFORE HELD THAT TAX AT SOURCE OUGHT TO HAVE BEEN DEDUCTED BY THE ASSESSEE FROM THE PAYMENT MADE TO THE STOCK EXCHANGE FOR THE SAID SER VICES AS PER THE PROVISIONS OF SECTION 194J AND SINCE NO SUCH DEDUCTION WAS MAD E BY THE ASSESSEE HE HELD THAT THE AMOUNTS PAID FOR THE SAID SERVICES WITHOUT DEDUCTION OF TAX AT SOURCE WERE LIABLE TO BE DISALLOWED U/S. 40(A(IA). THE MA TTER WAS CARRIED BEFORE THE LD. CIT(A) WHO HELD RELYING ON THE DECISION OF MUMBAI B ENCH OF ITAT IN THE CASE OF KOTAK SECURITIES LTD. VS. ACIT 318 ITR (AT) 268 TH AT THE AMOUNT PAID BY THE ASSESSEE ON ACCOUNT OF V. SAT CHARGES LEASELINE CH ARGES AND TRANSACTION CHARGES WERE IN THE NATURE OF REIMBURSEMENT OF CHAR GES PAID BY THE MEMBERS OF STOCK EXCHANGE IN LIEU OF INFRASTRUCTURE AND TRA DING FACILITIES PROVIDED TO THEM. HE THEREFORE HELD THAT THE SAID CHARGES WE RE NOT IN THE NATURE OF TECHNICAL OR MANAGERIAL SERVICES ATTRACTING DEDUCTI ON OF TAX AT SOURCE U/S. 194J. ACCORDINGLY THE DISALLOWANCE MADE BY THE A.O. ON A CCOUNT OF V. SAT CHARGES LEASELINE CHARGES AND TRANSACTION CHARGES BY INVOKI NG THE PROVISIONS OF SECTION 40(A)(IA) WAS DELETED BY THE LD. CIT(A). AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE HAS PREFERRED THIS APPEAL BEFOR E THE TRIBUNAL. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT TH E ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF KOTAK SECURITIES LTD. VS. A.C.I.T. 313 ITR (AT) 268 WHEREIN IT WAS HELD THAT STOCK EXCHANGES DO NOT RENDER ANY MANAGERIAL O R TECHNICAL SERVICES AND THEREFORE FEES PAID TO THEM CANNOT BE SUBJECTED TO TAX AT SOURCE U/S. 194 J. IT WAS HELD THAT THE PROVISIONS OF SECTION 40(A)(IA ) THEREFORE COULD NOT BE INVOKED TO DISALLOW ANY PAYMENT MADE BY ITS MEMBERS TO STOCK EXCHANGE FOR THE SERVICES RENDERED BY THEM. RESPECTFULLY FOLLOWING T HE DECISION OF THE TRIBUNAL IN THE CASE OF KOTAK SECURITIES LTD. (SUPRA) WE HOLD T HE IMPUGNED ORDER OF THE LD. CIT(A) DELETING THE DISALLOWANCE MADE BY THE A.O. O N ACCOUNT OF V. SAT ITA 5846/MUM/10 3 LEASELINE AND TRANSACTIONS CHARGES U/S 40(A)(IA) AN D DISMISS THIS APPEAL FILED BY THE REVENUE. 4. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 30 TH SEPT. 2011. SD/- SD/- (R.S. PADVEKAR) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED 30 TH SEPT. 2011. * REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 8 MUMBAI 4. THE CIT - 4 MUMBAI 5. THE DR BENCH G 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI