TMI Blog2010 (1) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to allow the rebate under section 88-E in respect of security transaction assessed to tax as per provisions of law after affording the assessee an reasonable opportunity of being heard, appeal filed by the Revenue is partly allowed, for statistical purposes. - IT Appeal No. 2290 (Del) of 2008 - - - Dated:- 29-1-2010 - Rajpal Yadav, K.D. Ranjan, JJ. C.S. Aggarwal, Sr. Adv., and K.C. Jain, CA for the Appellant A.K. Pandey, CIT, DR, for the Respondent ORDER K.D. Ranjan: This appeal by the Revenue for assessment year 2005-06 arises out of the order of the ld. CIT (Appeals)-VI, New Delhi. 2. The grounds of appeal raised by the Revenue are as follows:- "1. The ld. CIT (Appeals) erred on facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time settlement fee to SEBI under Securities and Exchange Board of India [Internal Liability Regularization Scheme, 2004]. The AO further noted that according to the Scheme all the brokers of BSE and NSE were required to pay turnover fees at a prescribed fee for an initial period of 5 years. For non-payment SEBI had charged interest on the amount payable by the brokers. The matter had gone to the court and Hon'ble Supreme Court vide order dated 1/02/2001 decided the matter against the brokers. As a result thereof the SEBI came out with a scheme for one time settlement payment by brokers, if they pay the turnover fee as also 20 per cent of total interest payable before the specified date i.e. 15/11/2004. The assessee paid the said amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of fee and, therefore, covered by the provisions of section 43-B of the Act. The ld. CIT (Appeals) after going through the matter in detail was of the view that the SEBI registration fee was in the nature of a fee. He placed reliance on the decision of Hon'ble High Court in the case of Om Prakash Aggarwal vs. Giriraj Kishore 164 ITR 376 wherein the definition of the word 'fee' and 'tax' was explained. According to the decision a fee is generally defined to be a charge for a special service rendered to individual by some Governmental agency. The amount of fee levied is supposed to be based on expenses incurred by the Government in rendering the service though in many cases the costs are arbitrarily assessed. Ordinarily the fees are unif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that it pertain to prior period not falling in assessment year or even if the liability had accrued in earlier years when transactions were entered. On the other hand ld Sr. DR supported the order of assessing officer. 6. We have heard both the parties and gone through the material available on record. ITAT, Mumbai Bench in the case of ITO vs. Suresh Chand Jain (supra) has held that the turnover charges payable by the assessee were in the nature of cess and duty payable under law. This issue is also covered by the decision of ITAT in the case of K. Holding Company P. Ltd. vs. DCIT, Special Range : 8, 32 SOT 586 wherein it has been held that SEBI turnover fee being a statutory liability was allowable under section 43-B of the Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he average rate of Income-tax comes to Rs.3,95,27,704/-. Under section 88-E of the Act the assessee is entitled for payment of Income-tax on profit and gains of business or profession arising from taxable security transactions computed in the manner provided in sub-section (2) of an amount equal to security transaction tax paid in respect of taxable security transactions. Sub section (2) of section 88-E provides the manner in which tax is to be computed. According to sub section (2) the amount of Income/tax arising from taxable security transactions shall be equal to the amount calculated by applying the average rate of income on which income. In the case of the assessee the assessing officer has worked out tax on assessed income of Rs.11,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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