TaxTMI 
TaxTMI 
2017 (11) TMI 59
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....xchange, Bombay Stock and MCX-SX. It is also earning brokerage income from providing platform of trading in shares etc and also engaged in its own trading of shares. It filed its return of income on 29th September, 2009 declaring an income of Rs. 3,48,590/- During the course of assessment proceedings, the AO observed that assessee has debited an amount of Rs. 1,24,58,945/- as brokerage. From the various details filed by the assessee, he observed that assessee has paid brokerage of Rs. 2,39,64,252/- and earned brokerage of Rs. 1,40,16,546/-. He, therefore, asked the assessee to file the details of TDS deducted on such payment under the provisions of Section 194H of the Income Tax Act. It was replied by the assessee that it has not deducted any TDS from the brokerage payment as per the provisions of explanation (i) to section 194H of the Income Tax Act. It was argued that in case of authorized sub broker, no TDS provision is applicable as they were dealing in securities. However, TDS was deducted on payment of brokerage to authorised persons pertaining to F and O segment. 4. However, the AO was not satisfied with the explanation given by the assessee. He observed that in a particu....
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....rties from time to time. " From the above, it is clear that this agreement is contrary to assessee's submission stated supra. Hence the nature of transaction is of a work contract covered u/s 194C and TDS is applicable. Further, in respect of the addition of Rs. 59,27,785/- the Assessing Officer has stated that: "Vide its submission dated 14.12.11 the assessee has stated that the nature of brokerage paid to sub-broker/authorized persons. It was paid to mobilize business for the company and introduce clients to the company. The brokerage paid is not for buying or selling of securities. But it is for introducing clients and getting business for the assessee. Hence in this cases where TDS has not been deducted on account of payment for brokerage done is being added back to the income of the assessee as per provisions of section 40 (ia) of the Act." Keeping in view of the above stated fact, I uphold both the additions made by the assessing officer of Rs. 81,53,443/- & 59,27,785 on account on non deduction of TDS." 7. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal challenging the addition of Rs. 81,51,443....
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.... 2011 for assessment year 2006-07 and in the case of M/s Tanna Agro Impex P. Ltd., vs. Addl. Commissioner of Income Tax, Range 2(3) vide ITA No. 3224/Mum/2010 order dated 29th July, 2011 for assessment year 2007-08. He accordingly submitted that this being a covered matter in favour of the assessee, therefore the grounds raised by the assessee should be allowed. In his alternate contention, the learned counsel for the assessee submitted that since the payee has already offered the commission income to tax, therefore, in view of the decision of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverages Private Ltd vs. CIT reported in 293 ITR 226 no disallowance can be made under section 40(a)(ia) of the Income Tax Act. 9. The learned DR on the other hand heavily relied on the order of the AO and the CIT(A). 9.1. We have considered the rival arguments made by both the sides, perused the orders of the AO as well as CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee in the instant case is a member of National Stock Exchange, Bombay Stock Exchange and MCX Stock Exchange. It has ....
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....orised as securities on which there is no. objection from the Revenue either before the A.O. or before the CIT(A). In fact the CIT(A) also gives a finding that the A.O. has not disputed that units of Mutual Funds are securities as per Securities Contracts (Regulation) Act, 1956. Assessee is in the business of Mutual Funds distribution and investment agent. From the details of brokerage received and service tax deducted there from it can be seen that out of the brokerage income of Rs. 8,28,56,873/- the brokerage income of ?8,27,47,095/- is from Mutual Funds. The balance brokerage of Rs. 1,09,779/- is towards bonds and fixed deposits. The subbrokerage is paid in relation to units of Mutual Funds. From the details placed on record, we ar e convinced that the sub-brokerage paid is connected with the services rendered in the course of buying and selling of units of Mutual Funds or in relation to transactions pertaining to Mutual Funds and as per the provisions of section 194H Explanation (i) these are not covered by the provision for deduction of tax at source. There is nothing on record, to indicate that the sub-brokerage is paid for any other services other than relating to securities....
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....y material before us so as to take a different view than the views taken by the Mumbai Bench of the Tribunal. We, therefore, set aside the order of the CIT(A) and direct the AO to delete the addition. ITA No. 3217/Del/2013 (Revenue) The grounds raised by the Revenue are as under: i. The Ld. CIT(A) erred in law and on facts in directing the AO to rework the amount of disallowance u/s 14A under the Rule 8D of the I.T. Rules 1962 in accordance with law laid down by the Hon'ble Jurisdictional High Court in Maxoop's case as well as the submission of the assessee. ii. The appellant craves, leave or reserving the right to amend modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 2. Facts of the case in brief is that the AO during the course of assessment proceedings observed that assessee has earned an amount of Rs. 66,00,000/- as exempt dividend income. However, the assessee has not disallowed any amount as per the provisions of section 14A. He, therefore, asked the assessee to explain as to why disallowance under section 14A should not be made. It was explained by the assessee that the dividend income i....