TMI Blog2012 (11) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... pose. - ITA No.59/Ahd/2010 - - - Dated:- 5-10-2012 - S/SHRI G.C. GUPTA, AND ANIL CHATURVEDI, JJ. Assessee by: Shri Tushar Hemani Revenue by: Shri B.L Yadav O R D E R PER G.C. GUPTA, VICE-PRESIDENT: This appeal by the assessee for the assessment year 2006-2007 is directed against the order of the CIT(A)-I, Surat dated 28.10.2009. 2. The grounds of the appeal of the assessee are as under: 1. The ld.CIT(A) has erred in law and on facts in confirming the disallowance of the commission expenses of Rs.5,08,931/- on the ground that the impugned commission expense are prohibited u/s.37(1) of the Act. 2. It is, therefore, prayed that the above disallowance confirmed by the ld.CIT(A) may please be deleted. 3. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h in the case of ACIT Vs. H. Nyalchand Financial Services Ltd. Others (supra). We find that the assessee has paid commission to various parties whose identity is not in dispute. The only objection of the Revenue authorities for its disallowance is that the payment has been made in violation of the SEBI Regulations and Bye-laws, and is therefore against public policy and disallowed under Section 37(1) of the Act. We find that the issue is covered with the decision of the ITAT, Ahmedabad Bench in ACIT Vs. H. Nyalchand Financial Services Ltd., (supra) wherein after detailed discussion of various arguments made from both the parties, the Tribunal has held as under: From the reading of this Bye-Law also, it is apparently clear that there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee being during the course of the arguments before us it was pointed out that the commission was paid at the rate of 50% of the brokerage. The commission to the extent it exceeds 40% of the brokerage received by the assessee from the clients is clearly prohibited by law and to that extent, in our opinion, Explanation to section 37(1) will clearly be applicable. The AO shall re-decide this issue after considering Bye-Law 218 of the Stock Exchange Ahmedabad after giving proper and reasonable opportunity to the assessee. He is further directed to allow the commission only to the extent it is permissible in accordance with Bye-Law 218 of the Ahmedabad Stock Exchange. Thus, this ground is allowed for statistical purpose. We being in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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