TMI Blog2009 (6) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Income-tax Act, 1961 are not applicable to SEBI turnover fees and, hence, the same is allowable on accrual basis. 2.The ld. CIT(A) grossly erred, both on facts and in law, in sustaining the addition of Rs. 24,043 out of telephone expenses and Rs. 22,383 out of car expenses. In doing so, the ld. CIT(A) has failed to appreciate that no disallowance can be made by attributing any part of the expenditure to personal expenses in case of the companies which have a separate legal entity in the eyes of law. A company is an artificial juridical person and, therefore, it would be totally imaginative to attribute any part of the expenses of the company for personal expenses. 3.Without prejudice to above, the proportion of disallowance sus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y made. 4. Before us, on behalf of the assessee, it was contended that the authorities below have failed to consider that the fee in question is actually not a fee; that a fee is charged for a special purpose to enable the agency and such fee has an element of a quid pro quo in it; that further, if the amount paid is neither a tax, nor a duty, nor a fee nor a cess, the provisions of section 43B are not attracted; that it is due to the express provision of the statute that SEBI becomes entitled to a certain amount fixed by it; that as observed in CIT v. Udaipur Distillary Co. Ltd. [2004] 268 ITR 305 (Raj.), notwithstanding the name used in section 43B, the items concerned must fall within the genus "taxation", to which, the express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I Act; and that, therefore, the authorities below have committed no error in concurrently disallowing the claim of the assessee under section 43B of the Act. Further, reliance has been placed on ITO v. Sureshchand Jain [2006] 100 ITD 435 (Mum.), wherein, SEBI turnover charges have been held to be a cess payable under the law and covered under the provisions of section 43B of the Act. 7. We have heard the parties and have perused the material on record. The issue, it is seen, stands squarely covered against the assessee by Sureshchand Jain s case ( supra ), wherein it was held, inter alia, that the SEBI turnover charges are payable on the basis of the turnover of the assessee; that it is not a fixed amount which has to be paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are also in the nature of tax, duty, cess or fees, payable under the law; that it cannot be concluded that the turnover charges are not payable under the law enacted by the Central Government; and that since SEBI has been given all powers by the Government to regulate the business and to recover its dues, the turnover charges payable by the assessee is certainly a cess or duty payable under the law. 8. So far as regards reliance by the assessee on Udaipur Distillary Co. Ltd. ( supra ), the same was a decision rendered by the Hon ble Rajasthan High Court with regard to the question whether the fee or charges received by the State Government for parting with its exclusive right to manufacture or vend any intoxicant is neither a tax, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of a private limited company, no such private user is envisaged. Therefore, ground No. 2 is allowed. 14. Coming to ground No. 3, the assessee debited a sum of Rs. 21,762 under the head "Loss on account of trading" in the profit and loss account during the year, the Assessing Officer asked the assessee to furnish the details of trading profit/loss on speculative business. The assessee had admitted that the loss on account of trading of Rs. 21,762 was in the nature of speculative loss. Thus, the Assessing Officer disallowed the assessee s claim. 15. The ld. CIT(A) upheld the disallowance . It was held that, however, since the assessee had taken a plea that there was a specific profit on account of sale and purchase of shares, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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