TaxTMI 
TaxTMI 
2016 (5) TMI 1403
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.... the matter of order passed u/s.143(3) of the I.T.Act. 2. Rival contentions have been heard and record perused. Facts in brief are that the assessee is engaged in share broking business. During the year under consideration assessee claimed expenditure on account of incentive paid to the various concerns. In respect of incentive paid to ICICI Bank, the AO disallowed the same on the plea that ICICI Bank is coming within the purview of Section 40A(2)(b), therefore, he disallowed 95% of the total brokerage earned by the assessee. 3. By the impugned order the CIT(A) deleted disallowance to the extent of 50%, against which assessee is in further appeal before us. 4. It was argued by ld. Senior AR Mr. S.E.Dastur that similar incentive has....
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....62,00,000 58,90,000 3,10,000 In justification of the transfer of the brokerage to the above parties, the assessee submitted before the AO that the incentive was paid by IBSL for High Value application and even after payment of incentives it managed to retain some brokerage. The incentive paid to all the 3 parties was at a comparable rate. But the AO did not accept the explanation of the assessee observing that out of the 3 parties to whom incentives had been passed by the assessee company, two i.e. Hotel Corporation of India and Bank of Baroda were third parties whereas ICICI Bank was a sister concern of the assessee company and belonging to the ICICI group falling under the same management. In view of payment of incentiv....
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....incurred wholly and exclusively for the purpose of assessee's business. 9. We have considered rival contentions. Ld. AR drew our attention to the order of Tribunal in assessee's own case for the assessment year 2001-02 and 2002-03, wherein exactly similar issue was considered Tribunal in ITA No.3423/Mum/2010 & ITA No.4868/M/2010 and ITANo.6948/M/2005, order dated 13-9-2013. We had carefully gone through the order of Tribunal and found that exactly similar issue was dealt by the Tribunal in assessee's own case and entire disallowance so made by the AO was deleted. As the facts and circumstances during the year under consideration are same, respectfully following the order of the Tribunal in assessee's own case, we direct the AO to delete ....
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....lowing the same, we do not find any infirmity in the order of CIT(A) for allowing assessee's claim for depreciation on BSE Membership Card. 14. Ground with regard to deleting disallowance of incentive of 50% have already been dealt by us while discussing assessee's appeal (i.e. ITA No.3767/Mum/2007), following the same reasoning, we direct the AO to allow 100% of the incentive payments so made. Accordingly, this ground of appeal is dismissed. 15. Next grievance of the revenue relates to deleting 75% of procurement expenses made to I-Bank. We have already dealt with this issue while deciding ground No.2 in assessee's appeal (i.e. ITA No.3767/Mum/2007). Following the same reasoning, we confirm the action of CIT(A) and direct the AO to a....
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....ee between the appellant and l-Sec Inc. (ISI) was at arm's length and in accordance with the provision of Transfer Pricing Rules. If the AO felt that the transaction of introduction fee was between two associated concerns, one of them being based abroad and the amount of transaction was not commensurate with the market rate, he should have taken recourse to provisions of section 92CA of the Act and referred the matter to the Transfer Pricing Officer for making a fair assessment. In my view, the payment made to ISI was as per prevailing market conditions and it was within norms fixed by BSE. Therefore, the AO was not justified in making any disallowance out of introduction fee paid to ISI." We have considered rival contentions and found ....