TaxTMI 
TaxTMI 
2010 (12) TMI 821
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....favour of the assessee by several decisions of the Tribunal. In one of such decisions rendered in the case of ITO vs. GDB Share and Stock Broking Services Ltd. 88 TTJ (Kol) 352, it was held by the Tribunal that penalty paid by the assessee as a registered broker to the stock exchange for not complying with various obligations/requirements is not in the nature of infringment of any law as envisaged in Explanation to section 37 and the same is allowable as deduction being the expenses wholly and exclusively incurred by the assessee for the purpose of its business. A similar view has been taken by the Chandigarh Bench of ITAT in the case of Master Capital Service Ltd. vs. DCIT 23 SOT 69 (Chd.) Respectfully following the said decision of the co-ordinate Bench of this Tribunal, we delete the disallowance made by the A.O. and confirmed by the ld. CIT(A) on account of penalty paid by the assessee to stock exchange and allow ground No. 2 of assessee's appeal. 5. As regards ground No. 3, it is observed that the issue raised therein relating to disallowance made by the A.O. and confirmed by the ld. CIT(A) on account of admission fees paid by the assessee to stock exchange amounting t....
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....oth the sides and also perused the relevant material on record. One of the main contentions raised by the learned counsel for the assessee on this issue is that even in the subsequent years, the same relatives of the directors of the assessee company have rendered the services for which salary has been paid to them. He has contended that the said salary which is much more than the salary paid in the year under consideration has been allowed by the A.O. in the assessments completed u/s 143(3). He has invited our attention to the copy one of such orders passed by the A.O. for A.Y. 2006-07 placed on record before us to point out that no disallowance on account of salary paid to relatives of the directors has been made therein. In our opinion, this is a crucial aspect having a direct bearing on the issue under consideration in as much as if the salary paid to the same relatives of the directors at higher rate in the subsequent years has been allowed by the A.O., there is no justifiable reason to doubt their capability to render the services in the year under consideration and to disallow the salary paid to them at lower rate. However, since this aspect put forth on behalf of the assess....
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....aterial available on record before him and worked out the rebate admissible to the assessee u/s 88E amounting to Rs. 78,03,015.22 as against Rs. 1,53,30,239/- claimed by the assessee. The matter was carried before the ld. CIT(A) and it was submitted on behalf of the assessee before him that books of account had been duly produced before the A.O. during the course of assessment proceedings for his verification. The paper book containing pages 1 to 226 was also filed by the assessee as additional evidence before the ld. CIT(A) along with three computer CDs containing books of account. The said evidence was forwarded by the ld. CIT(A) to the A.O. for verification and comments. The A.O., however, did not submit any remand report to the ld. CIT(A) despite sufficient opportunity. The ld. CIT(A), therefore, proceeded to decide the issue in the light of additional evidence filed by the assessee as well as books of account produced before him and held that the assessee was entitled for rebate of Rs. 1,53,30,239/- u/s 88E for the amount of STT paid. 12. We have heard the arguments of both the sides and also perused the relevant material on record. The limited relief which is sought b....
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....gh the said evidence was forwarded by the ld. CIT(A) to the A.O. seeking his remand report thereon, the period effectively given by him to the A.O. for submitting the remand report was less than 6 months. Keeping in view the fact that the additional evidence filed by the assessee involved voluminous details and documents running into 226 pages and the same was required to be verified from the books of account of the assessee, we are of the view that the opportunity afforded by the ld. CIT(A) to verify the additional evidence cannot be regarded as sufficient and proper. According to us, the A.O. in the facts and circumstances of the case deserves one more opportunity to verify the claim of the assessee for rebate u/s 88E from the details furnished by the assessee before the ld. CIT(A) for the first time as well as the books of account maintained by the assessee. We, therefore, set aside the impugned order of the ld. CIT(A) on this issue and restore the matter back to the file of the A.O. with a direction to decide the same in the light of details and documents furnished by the assessee after necessary verification. The A.O. is also directed to afford sufficient opportunity to the as....
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.... assessee entered into agreements with several jobbers/arbitragers with the understanding that the ultimate profit or loss in such trade would be divided between them equally. At our instance the learned representative for the assessee has filed copies of the agreements entered into with the jobbers/arbitragers. The agreements are in standard form. We may refer to the agreement with Mr Amit Zaveri, which is at page 23 of the paper Book. The preamble to the agreement states that Mr Amit Zaveri has shown his willingness to accept the agreement for dealing and trading in the Cash and FandO segment of NSE in accordance with the Rules prescribed by SEBI and that he has accepted to share the profit and loss in the transactions made by him on behalf of the assessee company as mutually agreed upon by the parties from time to time. Clause 1 of the agreement says that the assessee has given to the dealer (Mr Amit Zaveri) the right to trade in the Cash and FandO segment of the NSE. However, the overall supervision and control will be with the assessee. Clause 2 provides that Mr Amit Zaveri is authorized to trade and out of the net proceeds, whether profit or loss, from such dealing of shares ....
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....ing income, which arose to the assessee apparently without the help of the jobbers/arbitragers, amounted to Rs.3,07,47,989/-. The balance of Rs.2,10,92,703/- represented security transaction tax collected by the assessee. The total of the trading income formed part of the figure of Rs.10,38,05,456/- which was credited to the Profit and Loss Account for the year ended 31.03.2006 as "broking, trading and depository income". It was this figure which was explained in Schedule "G" to the accounts. The assessee again wrote a letter dated 11th April 2008 to the AO explaining the jobbing/arbitrage income which was included in the figure of Rs.6,91,06,196/-. In this letter it was submitted to the AO that the jobbing/arbitrage activity was carried out by the assessee in association with the jobbers/arbitragers in accordance with profit sharing agreements entered into with them. It was pointed out in this letter that the share of the jobbers and arbitragers were given to them and the details of such amounts had already been enclosed in the earlier dated 11th March 2008. We have looked into the details filed by the assessee along with its letter dated 11th March 2008 filed before the AO. The d....
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....ce the issue involved in the present case as well as all the material facts relevant thereto are similar, we respectfully follow the order of the Tribunal in the case of M/s Asset Alliance Securities Pvt. Ltd. (supra) and uphold the impugned order of the ld. CIT(A) deleting the addition made by the A.O. u/s 40(a)(ia) on account of payments made by the assessee to jobbers/arbitragers. Ground No. 3 and 4 of Revenue's appeal are accordingly dismissed. 17. In ground No. 5 to 11, the Revenue has challenged the action of the ld. CIT(A) in deleting the disallowance of Rs. 48,000/- made by the A.O. u/s 40(a)(ia) on account of V. SAT, Leaseline and transaction charges paid by the assessee to stock exchange. 18. In the P and L account filed along with its return, the amount paid to stock exchange on account of V SAT, Leaseline and transaction charges was debited by the assessee company. According to the A.O., the said charges paid by the assessee to the stock exchange were for such services which were in the nature of technical services falling within the purview of Section 194J. He, therefore, held that tax at source ought to have been deducted by the assessee company from t....