9911796707
TMI Blog2012 (12) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer noticed that assessee had shown gross receipts of commission at ₹ 61,91,491.60/-. He further noticed that assessee had claimed expenses of ₹ 20,85,695/- on account of commission expenses. Further a sum of ₹ 1,38,202/- was also claimed as Staff Commission expenses. The AO required the assessee to furnish complete details of commission paid with proof of TDS deducted and deposited on the commission so paid. He further observed that the said commission expenses, as claimed by the assessee, included ₹ 11,33,292/- paid to specified persons as under: - i. Smt. Rajni Mittal, Wife of partner ₹ 229,467/- ii. Sh. Ravi Kumar Mittal, brother of partner ₹ 872,245/- iii. Ravi Kumar Mittal (HUF) - HUF of bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s" in terms of section 2(h) of Securities Contract (Regulation) Act, 1956. The assessee further submitted that in its own case various mutual fund agencies from whom the assessee receives commission, had not deducted any TDS for the same reason. Further it was submitted that on the commission paid in respect of "other than on security" where ever the amount was more than ₹ 5,000/-, TDS was made as per the provisions of section 194H and where ever the payment was less than ₹ 5,000/-, no TDS was required to be made in terms of provisions of section 194H. Ld. CIT(A) has observed that in the remand report the AO submitted that disallowance was called for, for the following reasons: - (1) commission was paid to specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g reasons: - (1) HUF is a separate legal entity which can perform its business through its Karta and other members. As the services rendered by Sh. Ravi Kumar Mittal in his individual capacity had been accepted, there was no reason for not accepting his services in his capacity as a Karta of the HUF; (2) as regards AO objection with reference to section 40(a)(2)(b) ld. CIT(A) observed that the payment of commission to both the specified persons as well as persons other than specified persons had been made on the same basis and the same percentage. (3) as regards disallowance of commission payments on the ground that TDS had not been deducted on the commission payments in terms of section 194H of the Act, ld. CIT(A) after considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (i) to section 194H read with section 2(h) of the Securities Contracts (Regulation) Act, 1956, no TDS was required to be made on services related to security transaction. In this regard, ld. Counsel also referred to page 106 of paper book to demonstrate that HDFC was also not deducting TDS in respect of commission paid relating to mutual funds. In the alternative ld. Counsel relied on the decision of Spl. Bench in the case of Merilyn Shipping & Transports v. Addl. CIT [2012] 136 ITD 23 /20 taxmann.com 244 (Visakha) and submitted that in view of the majority view of Spl. Bench, since nothing was payable at the year end, therefore, no TDS was required to be made. 13. We have considered the submissions of both the parties and have perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme to the investors in such schemes; (ic) security receipt as defined in clause (zg) of section 2 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (id) units or any other such instrument issued to the investors under any mutual fund scheme; (ie) any certificate or instrument (by whatever name called), issued to an investor by any issuer being a special purpose distinct entity which possesses any debt or receivable, including mortgage debt, assigned to such entity, and acknowledging beneficial interest of such investor in such debt or receivable, including mortgage debt, as the case may be; (ii) Government securities; (iia) such other instruments as may be declared by the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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