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2016 (12) TMI 302 - AT - Income TaxTreatment as business income instead of dividend income - Held that:- The assessee is dealing in shares and securities, which means that it is buying and selling shares for its customers. The shares purchased, often, are kept by the assessee and such shares may have been purchased as cum dividend. The assessee is duty bound to remit the dividend as and when received to the purchasers of the shares. Therefore, there are credit and debit entries in the ledger account. At times, due to the ignorance of the buyers who may not be aware that they have purchased shares as cum dividend and therefore, did not claim the dividend amount from the broker. Because of such ignorance, the amount remained with the assessee. This is nothing but a benefit derived by the assessee from the transactions done in its ordinary course of business. Therefore, such surplus has a direct nexus with the business of the assessee and therefore, an income of the assessee. The Revenue Authorities have rightly taxed the surplus as income of the assessee Disallowance of interest expenses invoking provisions of Section 40A(2)(b) - Held that:- A perusal of the returned income of the payees shows that all the payees are assessed at the highest rate of tax. Since both, the payer and payees, are assessed at the same rate of tax, in our considered opinion, there is no basis of any Revenue leakage. As decided in case of PWS Engineers Limited [2016 (6) TMI 596 - GUJARAT HIGH COURT ] a certain income has already been taxed in the hands of the Directors. Permitting the Revenue to tax the same income again at the same rate in the hands of the principal payer would amount to double taxation. Only on this count, we answer question in favour of the appellant-assessee and against Revenue TDS u/s 194J - Non deduction of tds on turnover charges (transaction charges) paid to the stock exchange - Held that:- The transaction charges paid to the Bombay Stock Exchange by its members are for 'technical services' rendered is not an appropriate view. Such charges, really, are in the nature of payments made for facilities provided by the Stock Exchange. No TDS on such payments would, therefore, be deductible under Section 194J of the Act. - Decided in favour of the appellant-assessee Disallowance of depreciation on electrical fittings - Held that:- We find that under Rule 5 of the Income-tax Rules, which contains the depreciation table for various block of assets and under Part A(II) depreciation on furniture and fittings is @ 10%. It has been further explained that "electrical fittings" include electrical wiring, switches, sockets, other fittings and fans, etc. In the light of the depreciation table provided under the Income-tax Rules, we do not find any error or infirmity in the findings of the CIT(A).
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