TMI Blog2015 (12) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... AR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER For The Appellant: Shri. Amit Nigam, D.R. For The Respondent: Shri. Yogesh Aggrawal, Advocate ORDER PER SUNIL KUMAR YADAV: This appeal is preferred by the Revenue against the order of the ld. CIT(A) on a solitary ground that the ld. CIT(A) has erred in law and on facts of the case in deleting the addition of ₹ 35,56,116/- being the disallowance under section 40 (a)(ia) of the Income-tax Act, 1961 (hereinafter called in short the Act ), ignoring the facts that the commission paid by the assessee to its agent in relation to any transaction relating to securities for procuring business for it, falls under the category of payment received or re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer was not convinced with the explanations of the assessee and accordingly held that the commission has not been paid by the assessee to its agent in relation to any transaction relating to securities and he accordingly disallowed the said payment having invoked the provisions of section 40 (a)(ia) of the Act resulting into an addition of ₹ 35,56,116/-. 3. Assessee preferred an appeal before the ld. CIT(A) and filed written submissions, which were duly recorded by the ld. CIT(A) in his order. Being convinced with the explanations of the assessee, the ld. CIT(A) has deleted the addition. The relevant observations of the ld. CIT(A) are extracted hereunder for the sake of reference:- I have examined the finding given b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. was not justified in making the disallowances of ₹ 35,56,1167- u/s 40a (ia) of I.T. Act, 1961 on account of non deduction of TDS on payment of commission on procure the Mutual Fund business. It is worthwhile to mention here that the said commission was paid by appellant to its working agents in lieu of business procure from Mutual Fund Companies. The A.O. has not doubted the payment of commission to working agents by appellant during assessment year under consideration. The A.O. has also not doubted about the services rendered by these working agents to appellant for procure the business of Mutual Funds. Therefore, the identity of these working agents are proved as well as the genuineness and correctness of the payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available on record and have also gone through the orders of the authorities below and the judgments cited by Learned A.R. for the assessee. As per the facts noted by the Assessing Officer in the assessment order, it is seen that the assessee has received an amount of ₹ 73,28,868/- being commission received from various mutual fund registrars on account of brokerage or commission for subscribing to various mutual funds by a number of investors. The Assessing Officer has also noted that the assessee has acted as a Mutual Fund Broker under Broker Code ARN-8814 for such investors and had earned commission to this extent. The Assessing Officer has also noted that the assessee had debited brokerage amount of ₹ 51,27,815/- to one comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of ACIT-2(3), Mumbai vs. M/s S.J. Investment Agencies P. Ltd. (supra). As per the facts noted by the Tribunal, in that case also the dispute was similar. In that case also, the assessee was engaged as distributor of mutual fund units and he had appointed a sub agent for the same and commission was paid to the sub agent. Under these facts, it was held by the Tribunal that as per Explanation (i) to section 194H, no TDS was required to be deducted from such payment of commission because it is in relation to securities. In the present case also, the facts are similar and, therefore, this Tribunal s decision is squarely applicable in the facts of the present case. 5.2 In other two decisions also, under similar facts, similar issue was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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