2012 (11) TMI 415

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.... prohibited u/s.37(1) of the Act. 2. It is, therefore, prayed that the above disallowance confirmed by the ld.CIT(A) may please be deleted." 3. The learned counsel for the assessee submitted that the commission expenses paid to the various parties was for business purpose only. He submitted that the list of parties to whom commission was paid along with their PAN and address was filed before the AO. He submitted that the AO has disallowed the commission paid on the only ground that there is a violation of the provision of the SEBI Regulations, 1992, and therefore the deeming provision of section 37(1) of the Act was applicable to the case of the assessee. He submitted that the issue is covered in favour of the assessee with the decision o....

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....ious arguments made from both the parties, the Tribunal has held as under: "From the reading of this Bye-Law also, it is apparently clear that there is no prohibition in the payment of the commission to any other person introducing the client to the assessee provided it does not fall within Bye-Law 218(a)(i) to (vi). Clause (b) of Bye-Law 218 puts a restriction on the percentage of the sharing of brokerage with such persons who are not remisier or authorized clerk. To such person the assesses cannot pay brokerage more than 40% of the brokerage charged from the customers introduced by him. The facts of the case denote that the assessee has paid the commission to the extent of 50% of the brokerage while it cannot pay as per Regulation 218 of....