2014 (1) TMI 1287

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... in the matter ground-wise; the Revenue's appeal raising three grounds. The first is in respect of the disallowance in the sum of Rs.56,26,975/- u/s.40(a)(ia) in respect of lease line, VSAT and transaction charges paid by the assessee-company, a stock broker, to National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), i.e., on account of admitted non-deduction of tax at source thereon. The same stood deleted in appeal by the ld. CIT(A) following the decision by the Tribunal, among others, in the case of Kotak Securities vs. Addl. CIT [2008] 25 SOT 440 (Mum). 3. Even as was the admitted position during hearing, the matter stands since resolved, at least in so far as the state of Maharashtra is concerned, with the hon'ble jurisdictio....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....is for the reason that its operations were suspended for an extended period of time, and which stood commenced only in the current year, which would be apparent from the fact of the transaction charges being paid at a nominal sum of Rs.72,605/- for the current year. The tax at source has been deducted by the assessee from the following year, i.e., A.Y. 2008-09, onwards, and in support of which the assessment order u/s.144C(13) r.w.s 143(3) of the Act dated 23.10.2012 was placed by him on record, to exhibit that no disallowance u/s.40(a)(ia) stands made in assessment for that year. A reasonable ground, thus, exists. The matter, in any case, could be restored to the A.O. for verification of the assessee's claim in this regard, in view of the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... year. Under these circumstances, the ld. CIT(A), following the mandate of the decision by the hon'ble jurisdictional high court in Godrej and Boyce Mfg. Co. Ltd. vs. Dy. CIT [2010] 328 ITR 81 (Bom), restricted the disallowance u/s.14A(1) only to indirect (administrative) expenses at 0.5% of the average value of investment. In his view, the assessee having adequate funds available with it, no presumption as to the borrowings having been applied, even to the proportionate extent, in funding the tax exempt investments, would arise, drawing support from the decision in the case of CIT vs. Reliance Utilities and Power Ltd. [2009] 313 ITR 340 (Bom). The ld. DR was not able to bring out any infirmity in the impugned curtailment by the ld. CIT(A).....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ing a copy of the recent decision by the three-member Bench of the hon'ble Punjab and Haryana high court in CIT vs. Groz Beckert Asia Limited (in ITA No.366 of 2008 dated 24.01.2013), submitted that the issue stands thoroughly reviewed by the hon'ble court on the division bench expressing a doubt as to the correctness of the view of the said court in the case of CIT vs. Majestic Auto Limited (in ITA No.448 of 2007 dated 11.09.2008). It, after a review of the judicial precedents, including the decision by the Kerala high court in the case of Framatone Connector Oen Ltd. (supra) relied upon by the Revenue, held that club membership expenses does not represent a capital expenditure as no asset or advantage or benefit of an enduring nature to t....