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TMI Blog2015 (2) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... 03-04. The subject matter of the applications being the same, these were heard together, and are accordingly being disposed of vide a common order. The reference to the figures, made for providing context, are for that pertaining to A.Y. 2002-03. 2.1 It would be relevant to recount the background facts of the case. The assesseecompany, engaged in the business of share brokering, claimed expenditure in the sum of Rs. 497.52 lacs as marketing agent fees. The same involved payment to M/s.ICICI Capital Services Ltd. at Rs. 500/- for every new client account opened. This was towards introduction of the client as well as completion of all the formalities in relation to the opening of the new account. The payee, i.e., ICICI Capital Services Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. ICICI Equity Fund is the main investor in the assessee-company, holding 99.67% shares. Further, ICICI Equity Fund is a trust set up under the Indian Trust Act, 1892 in March, 2000, and ICICI Bank Ltd. is the only investor in the said Fund since inception (PB pg. 12). Further, ICICI Limited, ICICI Capital Services Ltd. and ICICI Personal Financial Services stand merged with ICICI Bank Limited in pursuance of an order of the hon'ble High Court of Gujarat at Ahmedabad in Company Petition No. 21 of 2002 connected with Company Application No. 360 of 2001 w.e.f. 30 March, 2002 (PB pgs. 13-17). On these grounds it is submitted that the finding by the tribunal that the assessee is not related to the payee company in terms of section 40A(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... market value of the services. The Revenue has not impugned the said finding/s per its instant applications. Accordingly, even if it is considered that there had been a mistake by the tribunal in holding as to the non-application of section 40A(2)(b), the same would be of no moment in-as-much as s.40A(2)(a) would in any case not apply in view of the said non challenge to the finding of fact qua the said provision by the tribunal, made assuming the application of the said provision, i.e., non-satisfaction of s. 40A(2)(b) (in its view) notwithstanding. Further, the order by the tribunal for A.Y. 2003-04 stands since confirmed by the hon'ble jurisdictional high court, to which the matter was carried at the instance of the Revenue (in ITA N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CICI Trusteeship Services Limited at the trustee of ICICI Equity Fund and 700 shares are held by nominees of ICICI Limited." 15. The learned AR with reference to above facts and from Explanation (b) of sub section 2 of section 40A has clearly demonstrated that the assessee was not having 20% shareholding; therefore, it does not fall in the persons referred in subsection (b) of section 40A of the Act therefore we are of the view that the AO is not correct in applying section 40A(2) of the Act. On merits, we find...........' [emphasis, ours] The basis of the said finding by the tribunal, as apparent, is the shareholding in the assessee-company. However, the finding issued by it is with regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the holding company ICICI Trusteeship Services Ltd. (ICICI Equity Fund). The first appellate authority had clearly held that the assessee, the payee, ICICI Cap. Services Ltd., and ICICI Bank Ltd. are related concerns, to which the provision of section 40A(2)(b) are clearly applicable. The said finding could only be disturbed or reversed on some factual basis, which we find as absent. There is, accordingly, no basis for the tribunal to have held that section 40A(2)(b) would apply qua the impugned payment/s to ICICI Capital Services Ltd. (I-Caps), which thus cannot be said to be on a firm basis. It is trite law that no court or tribunal can, vide its action or non action, cause prejudice to any party before it. There has thus occurred a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised by the Revenue, and for which limited purpose the appeals stand recalled. Clause (a) of Explanation below section 40A(2)(b) provides that a person shall be deemed to have substantial interest in the business or profession carried on by a company if such person is at any time during the previous year the beneficial owner of shares carrying not less than 20% of the voting power. The Revenue has provided the shareholding in the assessee-company as on 31.03.2000 to 31.03.2005 (PB pgs.1-11). Both as on 31.03.2002 and 31.03.2003, its' subscribed capital of 300 lac equity shares is held by ICICI Trusteeship Services Ltd. (ICICI Equity Fund) to the extent of 299.993 lacs shares, with the balance 700 shares being held by the nominees of IC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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