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2014 (4) TMI 246 - ALLAHABAD HIGH COURTAmbit of section 194H of the Act - Commission paid to TPL in relation to Mutual Fund Schemes - Whether the ITAT was justified in law in allowing expenses paid by the assessee firm without deducting tax at source, ignoring the provisions of section 40(a)(ia) – Held that:- The JCIT fell in error in holding that while TPL had motivated investors to subscribe to Mutual Fund Schemes, it had no connection whatsoever with 'securities' as defined in Explanation (i) and (iii) of Section 194-H - Explanation (iii) to Section 194-H specifically states that the expression 'securities' will have the meaning assigned to it in Clause (h) of Section 2 of the Securities Contracts (Regulation) Act, 1956. TPL had motivated potential investors to invest through the assessee in Mutual Fund Schemes, it has to be held that the services which were rendered in relation to a transaction in 'securities' stood excluded from the definition of "brokerage or commission" u/s 194-H - The CIT(A) was justified in coming to the conclusion that the services which were rendered by TPL were in relation to 'securities' - No other services had been rendered - the dis-allowance u/s 40(a)(ia) was not warranted. A restrictive interpretation should be adopted because unless this were done, the expression 'securities' having been defined in an inclusive sense in Section 2(h) of the Securities Contracts (Regulation) Act, 1956, would exclude a large number of transactions from the ambit of Section 194-H where 'commission or brokerage' is paid to a person acting on behalf of another person for service rendered in relation to any transaction relating to securities - This is a matter of legislative policy - The duty of the Court is to adopt the plain & natural meaning of the words used, particularly in a taxing statute - Once Parliament has legislated by specifically incorporating that the expression 'securities' would have the same meaning as in Section 2(h) of the Securities Contracts (Regulation) Act, 1956, the plain effect cannot be diluted by the Court by reading down the statutory provision - The duty of the Court is to interpret a taxing statute on its plain and literal meaning - the expression 'in relation to' and 'relating to any asset, valuable article or thing, not being securities', are expressions of width and amplitude – thus, there is no reason to interfere in the findings of the Tribunal – Decided against Revenue.
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