TaxTMI 
TaxTMI 
2015 (12) TMI 383
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....n short "the Act"), ignoring the facts that the commission paid by the assessee to its agent in relation to any transaction relating to securities for procuring business for it, falls under the category of payment received or receivable directly or indirectly by a person for services rendered, within the provisions of section 194H of the Act, hence disallowable under section 40 (a)(ia) of the Act. 2. The facts in brief borne out from the record are that the assessment was reopened by the Assessing Officer having taken note of the fact that the assessee has made payment of Rs. 35,56,116/- as commission to its agent for procuring business for it, but the assessee had not deducted tax at source on the payment as applicable under section 194....
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....with the explanations of the assessee, the ld. CIT(A) has deleted the addition. The relevant observations of the ld. CIT(A) are extracted hereunder for the sake of reference:- "I have examined the finding given by A.O. in assessment order in respect of disallowance u/s 40 (a)(ia) of I.T. Act, 1961 of Rs. 35,56,116/- and written submission of appellant mentioned supra and I find much force in the argument of appellant that the commission payment to its agents on account of procure to business of Mutual Funds etc on which the appellant has earned commission, do not attract the provisions of section 194H of I.T. Act, 1961 and accordingly the disallowances could not be made u/s 40a (ia) of I.T. Act. As mentioned earlier the appellant has pai....
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....ed by these working agents to appellant for procure the business of Mutual Funds. Therefore, the identity of these working agents are proved & as well as the genuineness and correctness of the payments of commission accepted by the A.O. Looking into these facts & circumstances, the disallowances made by A.O. of Rs. 35,56,116/- is hereby deleted. Thus the appellant gets relief of Rs. 35,56,116/-. Ground Nos. 1 to 3 are allowed." 4. Aggrieved, the Revenue is in appeal before the Tribunal and has placed reliance upon the order of the Assessing Officer; whereas the ld. counsel for the assessee has contended that even on merit the issue is covered in favour of the assessee by the orders of the Tribunal in the cases of DCIT vs. Noble Enclav....
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....814 for such investors and had earned commission to this extent. The Assessing Officer has also noted that the assessee had debited brokerage amount of Rs. 51,27,815/- to one company namely M/s Tapasya Projects Ltd. Thereafter, the Assessing Officer has noted that the assessee did not make any deduction of TDS while debiting the above brokerage amount in favour of M/s Tapasya Projects Ltd. The Assessing Officer disputed the allowability of this amount on two counts as to whether M/s Tapasya Projects Ltd. had rendered any actual services to the assessee or not and whether the amount is to be disallowed under the provisions of section 40(a)(ia) of the Act. On the first aspect i.e. regarding rendering of service, the Assessing Officer has held....