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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Maliram Makharia Finstock P Ltd. Income Tax Officer 7th 610 Raheja Centre, Free Press Floor, K.G. Mittal Vs. General Marg, Nariman Point Ayurvedic Hospital Bldg. Mumbai-400 021 Charni RD, Mumbai-400 002 Appellant .. Respondent PAN No. AACCM1102E Assessee by .. Shri Alok Bairagva, CA .. Shri Suman Kumar, DR Revenue by Date of hearing .. 07-03-2017 .. Date of pronouncement 07-03-2017 O R D E R PER MAHAVIR SINGH, JM:
This appeal by the assessee is arising out of the order of CIT(A)-59, Mumbai, in appeal No. CIT(A)-59/IT-232/ITO(TDS)-2(3)/11-12 dated 04-12- 2014. The rectification was carried out by ITO (TDS)-2(3), Mumbai for the A.Y. 2008-2009 vide order dated 12-12-2011 under section 154 of the Income Tax Act, 1961 (hereinafter ‘the Act’).
The only issue appeal of assessee is against the order of CIT(A) disallowing the expenses of transaction charges paid to stock exchange for non- deduction of TDS under section 194J of the Act and consequently the assessee was held to be defaulter under section 201(1) and levied interest under section 201(1A) of the Act. For this assessee has raised following grounds: -
“2. On the facts and circumstances of the case and law applicable thereto, the Ld. CIT(A) erred in holding that the appellant has not deducted TDS of Rs.1,10,614/- on expenses disallowed under section 40(a)(ia) being in the nature of transaction charges paid to stock exchanges under section 194J and leaseline (USA) charges under section 194I.
Maliram Makharia Finstock P Ltd.; (A.Y:08-09)
On the facts and circumstances of the case and law applicable thereto, the Ld. CIT(A) also failed to appreciate that payee are assessed to tax and have already paid taxes on the said amount and therefore, there should be no demand raised u/s 201 (1). The aforesaid view also supported by the subsequent amendment made by the Finance Act, 2012 by inserting proviso to section 201 (1) which is clarificatory in nature and inserted with a view to rationalize the provision of TDS. Therefore, the amendment should be applicable with retrospective effect.
4. On the facts and circumstances of the case and law applicable thereto, the Ld. CIT(A) erred in holding that interest u/s 201 (1A) is leviable on non-deposit of TDS amounting to Rs. 39,821/-.”
3. At the outset, the learned Counsel for the assessee stated that the AO made disallowance by observing as under: - “As per the information received in this case there is a disallowance of expenses to the tune of Rs.4,88,1481- u/s 40(a)(ia) on account of non-compliance with the provisions of deduction of tax at source, on which no TDS has been deducted u/s 194I comes to Rs.1,10,6141- © 22.66% and consequent interest u/s 201(1-4) leviable on the tax from Apri12008 till the date of order i.e. for 36 months.
Tax u/s 201(1) is payable Rs. 1,10,614/-. Interest u/s 201 (1A) thereof Rs. 39,821/--. Total Tax Payable Rs.1,50,435/-.
The learned Counsel for the assessee stated that now this issue stands cover in favour of assessee and against Revenue by the decision of Hon’ble
Maliram Makharia Finstock P Ltd.; (A.Y:08-09)
Supreme Court in the case of CIT v. Kotak Securities Ltd. (2016) 383 ITR 0001 (SC). Respectfully following the same we direct the AO to allow the claim of the assessee. 5. In the result, the appeal of assessee is dismissed. Order pronounced in the open court on 07-03-2017.