Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (2) TMI 1427 - ITAT MUMBAIDeduction of TDS u/s 194H - Disallowance of sub-brokerage u/s 40(a)(ia) - Assessee was engaged in distribution of units of Mutual Funds and no tax was deducted at source from brokerage by Mutual Fund companies - Assessee contended since he received brokerage without any TDS in view of provisions of section 194H, the payment of sub-brokerage on similar lines should also gets exemption u/s 194H - CIT(A) has accepted the contention and directed the A.O. to delete the disallowance so made u/s 40(a)(ia). HELD THAT - As per 194H, the commission or brokerage definition does not include transactions in securities.There is no doubt that Mutual Funds are categorised as securities under Securities Contract (Regulation) Act. From the details placed, we are 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. The A.O. also accepts that the brokerage received by the assessee is not covered by TDS whereas he was of the opinion that the sub-brokerage paid is covered by the provisions. We are unable to understand this logic of the A.O. For these reasons, we are of the opinion that the order of the CIT(A) does not require any modification and accordingly the same is confirmed. With reference to cross objection regarding disallowance made by AO includes service tax, since the entire amount disallowed by the AO was allowed to the assessee, there is no need to adjudicate this issue separately and there is no need to give any specific direction to the A.O.
|