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2015 (11) TMI 1368 - ITAT AHMEDABAD

2015 (11) TMI 1368 - ITAT AHMEDABAD - TMI - Addition of NSE penalty - CIT(A) deleted the addition - Held that:- CIT(A) follows case law of ITO vs. GDB Share and Stock Broking Services Ltd. [2003 (8) TMI 169 - ITAT CALCUTTA-C] in deciding the very issue in assessee’s favour. The Revenue fails to point out any distinction on facts or law before us. It does not quote any case law to the contrary. This first ground accordingly fails. - Decided against revenue

Section 36(1)(iii) interest d .....

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ebt disallowance - CIT(A) deleted the addition - Held that:- Sale/purchase price of shares had been credited in the respective accounts. The CIT(A) follows special bench decision of DCIT vs. Shreyas S. Morakhia [2010 (7) TMI 455 - ITAT MUMBAI] that value of the share transacted by a broker-assessee on behalf of the concerned client is very much allowable as bad debts. The Revenue fails to rebut this legal position.- Decided against revenue

Brokerage rebate disallowance - CIT(A) delete .....

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in question does not lack genuineness element. It has come on record that it is in stock broking business. It has accordingly offered the impugned rebate of ₹ 34,67,507/- in business expediency. We do not find any ground to interfere with the lower appellate findings under challenge. - Decided against revenue

Section 14A disallowance - Held that:- When there is no net interest expenditure upon setting off interest credited to P&L account, no part of interest debited is to be di .....

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llowance of provision made for leave encashment u/s 43B(f) - Held that:- . The assessee submits to have paid leave encashment of ₹ 19,439/- as on 04.09.2008 and ₹ 19,661/- on 24.09.2008. There is no dispute about the above stated facts as well as the legal background of the issue. We follow the hon’ble apex court Bharat Earth Movers vs. CIT, [2000 (8) TMI 4 - SUPREME Court ]order in these facts and direct the assessing authority in the same terms as indicated therein. - Decided in fa .....

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- non-deduction of TDS qua payments made of NSE lease line charges, NSE VSAT charges and MTNL expenses - Held that:- In recent decision of CIT vs. Ansal Landmark Townships Pvt Ltd, (2015 (9) TMI 79 - DELHI HIGH COURT) held that when a deductor-assessee is not an assessee in default u/s 201(1), it is deemed that it has deducted and paid the tax on such sums on the date of filing of return of income by the concerned payee as referred in the above stated proviso. We accordingly remit this issue ba .....

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ioner : Shri R.K. Gupta, Sr. DR For the Respondent : Shri Vijay Ranjan, AR ORDER Per Shri S. S. Godara, Judicial Member These cross appeals filed by the Revenue and assessee for AY 2008- 09, arise from order of the CIT(A)-XVI, Ahmedabad, dated 28.04.2011 passed in case no.CIT(A)-XVI/AC.Cir.3/710/10-11, in proceedings under section 143(3) of the Income Tax Act, 1961, in short the Act . 2. We come to Revenue s appeal ITA No.1531/Ahd/2014. Its first ground challenges the lower appellate order delet .....

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inding in preceding assessment year 2007-08. The CIT(A) follows caselaw 88 TTJ 352 (Kol), ITO vs. GDB Share and Stock Broking Services Ltd., in deciding the very issue in assessee s favour. The Revenue fails to point out any distinction on facts or law before us. It does not quote any case law to the contrary. This first ground accordingly fails. 2. The second substantive ground seeks to restore section 36(1)(iii) interest disallowance of ₹ 4,61,573/-. The Assessing Officer noticed assesse .....

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d Brands Ltd that certain expenses had been met on behalf of these entities to be lacking any business purpose in absence of details being filed. The Assessing Officer was further of the view that such reimbursements could not be taken as loans/advances. He cited lack of details qua the advances in question of ₹ 32,03,147/-. And observed that assessee had paid huge interest sums on the one hand and advanced its interest bearing funds without charging interest to above stated entities. This .....

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ded therein. The Revenue s arguments strongly support Assessing Officer s action. It transpires from the case file that assessee s interest free funds as on 31.03.2008 read a figure of ₹ 1,25,83,17,835/- in the nature of share capital, reserves and surplus etc. It files tribunal s order in its own case for AY 2004-05 in ITA No.1890/Ahd/2007 decided on 19.12.2008 deciding the very issue in its favour in identical circumstances. We follow suit in these facts and reject this Revenue s ground .....

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ee had offered only brokerage sums as its income u/s 36(2) of the Act in profit and loss account. He accordingly made the impugned disallowance of this bad debts claim. 5. The CIT(A) deletes this bad debts disallowance after quoting case law of TRF Ltd. Vs. CIT, 323 ITR 397 (SC) to the fact that it is not necessary to prove the same to have actually become bad as per the relevant law amended from 01.04.1989. The CIT(A) comes to latter aspect (supra). The assessee submitted in the lower appellate .....

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uch allowable as bad debts. The Revenue fails to rebut this legal position. We reject this third substantive ground accordingly. 6. This leaves us with the Revenue s forth and last substantive ground seeking to restore brokerage rebate disallowance of ₹ 34,67,507/-. This sum represents assessee s rebate to its client on the ground that the brokerage rate charged was found to be more than that agreed, the same was reduced in order to retain the clientele and it is a volume-base promotion sc .....

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s that the same was given in the respective ledger account of the clients. The assessee s ledger balance in this regard was found to be accordingly reduced in all cases. All this results in deletion of the impugned disallowance. 8. We have heard both the parties. It transpires from pages 91 to 102 of the paper-book that assessee s gross brokerage income is of ₹ 59,23,26,790/-. The corresponding brokerage refund figure in question is @ 0.59% of this gross income. The relevant segments are c .....

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e do not find any ground to interfere with the lower appellate findings under challenge. This forth and last ground is also rejected. Revenue s appeal ITA No.1531/Ahd/2011 is dismissed. 9. We advert to assessee s appeal ITA No.1718/Ahd/2011. Its first ground challenges Section 14A disallowance of ₹ 15,50,074/-. Its exempt income from dividends reads a figure of ₹ 11,67,255/- arising from investment of ₹ 3,37,75,313/- in shares of M/s. Arvind Mills Ltd. with long term investment .....

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of ₹ 13,81,198/- and ₹ 1,68,877/-. The CIT(A) confirms Assessing Officer s action. 10. The Assessee states in the course of hearing that its interest free funds as on 31.03.2008 are of ₹ 1,25,83,17,836/- in the nature of share capital, reserves and surplus etc. Corresponding investments giving raise to the impugned exempt income are of ₹ 3,37,75,313/-. Much less than the interest free funds. It is evident that assessee s exempt income in relevant previous year is of S .....

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s attributable to earning of exempt income. The Revenue does not point out any exception thereto. We accordingly delete the interest disallowance under Rule 8D(2)(ii) of ₹ 13,81,198/- (supra). Coming to administrative expenses disallowance of ₹ 1,68,877/- under Rule 8D(2)(iii), the assessee fails to dispute correctness thereof since the impugned assessment year is 2008- 09. This latter disallowance figure is confirmed. This ground is partly allowed. 11. The second substantive ground .....

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interlocutory order in SLP (CC) No.12060/2008 directing the said assessee to pay tax as if the above said statutory provision duly stood in the Act and also holding it entitled to raise the very claim simultaneously. He disallowed the impugned leave encashment claim accordingly. The CIT(A) upholds the same. 12. We have heard rival contentions. The assessee submits to have paid leave encashment of ₹ 19,439/- as on 04.09.2008 and ₹ 19,661/- on 24.09.2008. There is no dispute about the .....

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es hold that stock exchange membership card is not an eligible asset u/s 32 of the Act as held by hon ble Bombay high court in M/s. Technoshares and Stocks Ltd. Vs. CIT 193 Taxman 248. The CIT(A) observes that the hon ble apex court has reversed the above stated decision as reported in 327 ITR 323 with a rider that the same relates to Bombay Stock Exchange card only. He reproduces relevant portion of this judgment as well. However, the Revenue fails to point out any distinction between the asses .....

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