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2015 (5) TMI 543 - ITAT MUMBAI

2015 (5) TMI 543 - ITAT MUMBAI - TMI - Disallowance of compensation paid to sister concern for executing transactions on the Bombay Stock Exchange - Held that:- Assessee has submitted its computation of total income, balance sheet for the relevant assessment year along with details of brokerage received by HCGSSL from which it is clear that the sister concern HCGSSL declared the said amount in their profit and loss account which is placed. Even the CIT(A) has also observed that assessee has prod .....

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Audit fees disallowed - Held that:- As no TDS was deducted therefrom. We confirm the action of the AO for the disallowance so made. - Decided against assessee.

Disallowance of professional fees - no TDS was deducted - Held that:- assessee has deducted and paid tax on the professional fees on 30-7-2008, which was before the due date of filing return of income. In view of the decision of Virgin Creation [2011 (11) TMI 348 - CALCUTTA HIGH COURT] and the decision of Oracle Softwar .....

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d in favour of assessee for statistical purposes.

Disallowance of expenditure on repairs and maintenance - assessee has not provided details of TDS deducted u/s.194C/194J - Held that:- CIT(A) directed the AO to allow the said expenditure after perusal of the bills along with the log book with reference to the provisions of Section 40(a)(ia) of the I.T.Act. We do not find any infirmity in this direction of CIT(A).- Decided in favour of assessee

Disallowance of loss on tradin .....

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CX was not required. As per the bills, copy of the account of derivatives, bank statement evidencing the payment, we hold that transaction was off market and speculative in nature. Thus the loss so incurred was speculative loss, which is not eligible for set off against the long term capital gains declared by assessee. However, such speculation loss is eligible to be carried forward u/s.73(1) to be set up against speculation profit only in the subsequent year as per provisions of law. - Decided .....

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On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming the action of the Income Tax Officer, 4(1)(2), Mumbai ("the AO") of disallowing a sum of ₹ 7,57,600/-, being an expenditure, in the nature of compensation, incurred towards sister concern for executing transactions on the Bombay Stock Exchange for clients of such sister concern on the ground that the Appellant has not proved as to whether such compensation was offered to tax by the siste .....

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at the action of the lower authorities be deleted. Ground No.3: Disallowance of repairs and maintenance expenses ₹ 4,36,848/- : 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in giving direction to the AO to allow the expenditure subject to perusal of supporting documents though the same were made available to him in the course of the appellate proceedings. 2. The Appellant prays that repairs and maintenance expenditure as claimed in the return of income .....

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rant of adequate opportunity. 3. The Appellant prays that it be held that the action of the lower authorities be deleted and the claim of the Appellant as made in the return of income be allowed. Without prejudice to above If at all the action of the lower authorities be upheld then, in that case, the transactions of trading in derivatives be treated as off market transactions and loss on such transactions be allowed to the Appellant. Without prejudice to grant of 4 above Ground No.5: Trading in .....

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claim of short term capital loss on sale of shares by treating the same as bogus. The AO also disallowed compensation paid to sister concern amounting to ₹ 7,57,600/-, repair and maintenance expenses of ₹ 4,36,848/-, ₹ 10,44,594/- u/s.43B etc. By the impugned order, the CIT(A) confirmed the disallowance of compensation paid to sister concern ₹ 805,864/-, disallowance made u/s.40(a)(ia), maintenance expenses and short term capital loss. Against which assessee is in furthe .....

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Stock Exchange and it is vice versa when the assessee receives orders for execution on the National Stock Exchange. In light of the services availed by the assessee from HSSBL a compensation of ₹ 7,57,600 lakhs was paid to them. The AO disallowed the compensation paid to M/s SCG Stock & Share Brokers Ltd.(HSSBL), ₹ 757,600/- after having discussion at para 6, on the plea that consideration was paid as compensation to the sister concern and not as a broker. By stating that assesse .....

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from which it is clear that the sister concern HCGSSL declared the said amount in their profit and loss account which is placed at page 511 to 533 of the paper book. Even the CIT(A) has also observed that assessee has produced the particulars of the transaction and the basis on which the compensation of ₹ 7,57,600/- was paid to the said HSSBL. We found that the payment was made out of commercial expediency and for the purpose of business expenditure. The details of brokerage received by th .....

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of the AO for the disallowance so made. 5. The AO also disallowed professional fees of ₹ 50,000/-. The CIT(A) has dealt with the issue in para 4.9 and held that professional fees paid on 7-6-2007 on which TDS deducted and paid on 30-7-2008 i.e. before the due date of filing the return of income. However, by following the Special Bench decision in the case of Bharati Shipyard Ltd., 141 TTJ 129, he confirmed the disallowance. 6. We have considered rival contentions and found that payment of .....

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nce Act, 2010, which provides for deductibility of expenditure if TDS paid within return filing due date, amendment is curative in nature, therefore, should be given retrospective operation. Accordingly, we direct the AO to verify the date of actual payment of TDS and if he finds that the same was paid before the last date of filing of the return, he should delete the disallowance so made. 7. The AO has disallowed expenditure on repairs and maintenance by having discussion at para 7. The disallo .....

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ealt this issue exhaustively in para 4 of his order. The AO has recorded the statement u/s.131 of Ms. Varsha Vaidya director of the assessee company on 14-12-2010. He has also recorded the statement of Managing Director of the assessee company Mr. Arvind Bhinde on 15-12-2010 and also recorded the statement of Mr. Anil Agarwal the Proprietor of M/s Trishla Commodities, the MCX Broker through whom transactions has been entered into by the assessee. The CIT(A) has called for the remand report from .....

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k Exchange under the buyback offer and earned long term capital gain of ₹ 1,55,99,087/-. At the very same time assessee has entered into transaction of purchase and sale of derivatives through Trishla a Prop. Concern of Anil Agarwal and incurred loss of ₹ 1,55,41,449/- and claimed it as short term capital loss and setted off against the long term capital gains of ₹ 1,55,99,087/-. The lower authorities have declined the claim of observing that from the intimation received from M .....

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t considered the Question 20 and its answer which was given by Ms. Varsha in her statement recorded u/s.131 which proves in what context she agrees that the said transactions are bogus. Question No.20 and its answer given by Varsha are reproduced as under :- Q.20 As stated in answer to Q.no.19 that the transaction reflected in the contract notes issued by M/s Trishla Commodities a member of M CX, are genuine. Now I am showing you letter dated 10.11.2010 issued fry MCX where it is categorically s .....

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tes issued by M/s. Trishla Commodities in our company's name are totally bogus. 10. With regard to the AO s reliance on the answer to question No.22 by Mr. Arvind Bhinde, the contention of the learned AR was that Mr. Arvind Bhide has confirmed this on account of the facts that if the transaction are not through MCX means they are bogus however AO has not quoted Question No. 21 and its reply given by Mr. Arvind Bhide which is as under: Q.21 Now I am showing you the letter dated 10.11.2010 iss .....

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as also of the opinion that the transaction should be entered through MCX only and if it is not entered through MCX then it will be bogus. ''Q.22 It means the transaction entered into through M/s. Trishla Commodities, as claimed, are bogus? Ans- Yes, It can be said like that if MCX confirms the same. ''Q.23 Please tell whether at any instance, you have received any amount from M/s Trishla Commodities.? Ans- No, I have never received any amount from that concern during the course .....

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authorized signatory. Further to enforce that this business was looked after by myself, Shri. Devendra Jain and Shri. Ravindra Jain. (Q.19 As stated, you have provided these bills and contract notes on bogus transaction on . communication basis. Please tell now the entire amount of transaction effects with said company), were credited in your account. If it was a commission based bogus transaction, only commission amount should have been credited in your account? Ans- Sir" I cannot say anyt .....

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