DCIT. CIR-4(2)(1),, MUMBAI vs. M/S. SHCIL SERVICES LTD.,, MUMBAI

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. The facts as well as issues in both the appeals of Revenue for Assessment Years 2013-14 and 2015-16 are stated to be identical and therefore, the appeals were heard together and are now being disposed-off by way of this common order for the sake of convenience and brevity. The appeal for AY 2013-14 assails the M/s. SHCIL Services Ltd. Assessment Years: 2013-14 & 2015-16 order of Ld. Commissioner of Income Tax (Appeals)-9, Mumbai [in short CIT(A)], order dated 24/01/2019 on following grounds: -

2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) further erred in not confirming the action of the AO that the payments of sub- brokerage paid by the assessee falls under section 194H of the I.T. Act. 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the total sub-brokerage of Rs.2,58,72,096/- incurred by the assessee. As evident, the revenue is aggrieved by deletion of disallowance of sub-brokerage charges for Rs.258.72 Lacs.

2. We have carefully heard the relevant submissions and perused relevant material on record including decisions filed by the assessee vide letter dated 12/01/2021. Our adjudication to the subject matter of appeal would be as given in succeeding paragraphs.

3. The material facts are that the assessee being resident corporate assessee is stated to be engaged in share-broking and providing portfolio management services. An assessment was framed for the year under consideration u/s. 143(3) on 22/02/2016 wherein it was saddled with a sub-brokerage expense disallowance of Rs.258.72 Lacs. The same stem from the fact that the assessee paid sub-brokerage charges of Rs.1552.32 Lacs to its parent company M/s. Stock Holding Corporation of India Ltd. after deduction of tax at source u/s 194J. The brokerage was paid @60% of gross brokerage as against 50% paid in AY 2009-10 which was increased to 75% in AY 2010-11 but reduced to 60% from second half of AY 2011-12. The Ld. AO restricted the M/s. SHCIL Services Ltd. Assessment Years: 2013-14 & 2015-16 deduction to 50% and disallowed 10%, treating the same to be unreasonable and excessive in terms of Sec. 40A(2)(b).

4. Upon further appeal, Ld. CIT(A), relying upon Tribunal’s decision in assessee’s own case for AYs 2010-11 & 2011-12 which was followed in appellate order for AY 2011-12, deleted the addition. Aggrieved, the Revenue is in further appeal before us.

5. Upon careful consideration of factual matrix, we find that learned CIT(A) has merely followed the binding decision of the Tribunal in assessee’s own case for AYs 2010-11 & 2011-12. The revenue agitated the stand of Tribunal before Hon’ble Bombay High Court vide of 2016 for AY 2011-12 order dated 06/02/2019 and ITA No,1272 of 2017 for AY 2010-11 order dated 06/01/2020 wherein Hon’ble Court has refused to admit the appeal for both the years. Similar is the view of the Tribunal for AY 2012- 13 (ITA Nos.206, 279/Mum/2017 order dated 29/11/2019) as well as in AY 2014-15 (ITA No.1811/Mum/2019 order dated 07/12/2020). Hence, no infirmity could be found in the impugned order. Accordingly, the revenue’s appeal stand dismissed.

6. Similar are the facts as well as issues in revenue’s appeal for 2015-16 wherein Ld. AO restricted the sub-brokerage charges to 50%. However, Ld. CIT(A) deleted the same on similar logic and reasoning. Since facts are pari-materia the same, following our adjudication in AY 2013-14, we dismiss the appeal. M/s. SHCIL Services Ltd. Assessment Years: 2013-14 & 2015-16