TMI Blog2010 (7) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Assessing Officer disallowed penalty amounting to ₹ 39,522/- paid to BSE on the ground that the same has been paid to SEBI, a statutory body, for violation of statutory law. 2.2 In appeal, the CIT(A) deleted the disallowance on the ground that the payments made to Stock Exchange for violation of their regulation are not expenditure for any purpose which is an offence or which is prohibited by law. Therefore, the Explanation to sec.37 is not correct. Aggrieved with such order of CIT(A), the Revenue is in appeal before us. 3. The learned D.R. submitted that BSE being a statutory authority, violation of its rules regulations amount to infringement of law, therefore, the Assessing Officer was justified in disallowing the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. We hold and direct accordingly. Ground No.1 by the Revenue is accordingly allowed for statistical purposes. 6. Ground No.2 by the Revenue relates to the order of the CIT(A) in deleting transaction charges of ₹ 13,87,154/- made by the Assessing Officer u/s.40(a)(ia) of the I.T. Act. 6.1 After hearing both the sides, we find the assessee has debited transaction charges of ₹ 13,87,154/- which is payable to Stock Exchange on account of services rendered by it with regard to transactions in securities through the Exchange. The Assessing Officer disallowed the claim made by the assessee on the ground that no tax has been deducted out of such payment and, therefore, in view of the provisions of sec.40(a)(ia), the above amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooked in the books of account as commission payment. Since the assessee has not deducted any TDS on this amount, the AO confronted the same to the assessee. Not being satisfied with the explanation given by the assessee and referring to the provisions of sec. 194(1), the AO held that the company has enlisted the services of jobbers for carrying out the work which primarily belongs to the company. The payments made are in lieu of services rendered for carrying out certain work and the payments made therein fall within the purview of sec. 194C of the I.T. Act since it is the assessee who has to carry out the work of jobbing through one set of jobbers or another year after year. The work can only be said to be belonging to the assessee in whos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es between the appellant and the jobber after deducting the cost. The relationship between the jobber and the appellant company is that of co-sharer of profit/loss, therefore, provisions of section 194C is not attracted. As provisions of section 194C is not attracted, the disallowance u/s. 40(a)(ia) is held to be not proper. Aggrieved with such order of CIT(A), the Revenue is in appeal before us. 9. The ld. D.R. relied on the order of the CIT(A). 9.1 The ld. counsel for the assessee, on the other hand, relied on the order of CIT(A) as well as the terms conditions of the MOU and submitted that it is share of profit and not even payment of any salary since the AO has also not invoked provisions of sec. 192 of the I.T. Act. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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