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2012 (12) TMI 417 - MADRAS HIGH COURTDetermination of relationship with the bank - stock broker - agent and principal - triple taxation of the same income in the hands of appeal, Indian Bank and PSUs? - ITAT concluded that the appellant did not act as an agent of Indian Bank - whether the assessee could be termed as a broker for Indian Bank, that the assessee could not claim any interest on a sum of Rs.14,78,91,000/- at the time when Indian Bank paid the consideration for the purchase of securities. The second question herein is that whether the said sum could be held to have been given to the assessee for the purpose of taking demand drafts payable to the 9 public sector undertakings as by way of extra interest, payable by the Bank on the fixed deposits maintained by the public sector undertakings. The third question is as regards the relevance of the Criminal Court's decision. The Assessing Officer pointed out that of the eight public sector undertakings, three of them confirmed the receipt of demand drafts. The rest of them denied to have received any such demand drafts either from the assessee or from Indian Bank. The Officer pointed out that there was no agreement between the assessee and the Indian Bank about this payment. Held that:- when after a full-fledged trial, a Court of competent jurisdiction had pronounced on the relationship between the parties, that A2, the assessee herein, acted as a broker only, in the absence of any contra evidence produced by the Revenue, the Tribunal should have considered this finding as answering the question on the role of the assessee as a broker. Contrary to the view of the Tribunal, the evidence spoken therein by the prosecution witnesses, clearly establish the role of the assessee as a broker, that he never acted as a principal to deal with the securities on his own without any instruction from the Indian Bank. The status of the assessee vis-a-vis Indian Bank was only that of a broker of Indian Bank and nothing else. - The assessee could not be mulcted with any liability as regards the sum of Rs.14,78,91,000/- as his income. - Decided in favor of assessee.
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