TMI Blog2023 (2) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... iew is fortified by various judicial precedence, including case of PCIT vs West Bengal Housing Infrastructure Development Corporation Ltd. [ 2018 (9) TMI 114 - CALCUTTA HIGH COURT] where it has been clearly held that since, there is neither any borrowing of money nor incurring of debts on the part of the assessee, interest as defined u/s. 2(28A) of the Act can have no application to said payment. Also in the case of ITO vs T. Rajendran [ 2016 (1) TMI 635 - ITAT CHENNAI] had considered an identical issue and held that, when the impugned payment had a direct link with the trade liability, then same cannot fall within the category of interest as defined u/s. 2(28A) of the Act for the purpose of deduction of tax at source u/s. 194A of the Act. Provisions of section 194A has no application to delayed payment charges on trade liability and thus, the assessee does not require to deduct TDS u/s. 194A of the Act. Consequently, impugned payment cannot be disallowed u/s. 40(a)(ia) - we direct the AO to delete additions made towards disallowance of late payment charges u/s. 40(a)(ia) of the Act. - Decided in favour of assessee. Assessment of profit/loss derived from share trading a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g disposed off, by this consolidated order. 2. Both the assessee s have filed common grounds of appeal in their respective Memorandum of appeal and also many times amended the grounds of appeals. From the grounds of appeals of both assessee s, two issues are emanating for adjudication viz. (i) disallowance of delayed payment charges u/s. 40(a)(ia) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for failure to deduct TDS u/s. 194A of the Act (ii) assessment of profit/loss derived from purchase and sale of shares under the head speculative income/loss as against assessee s admission under the head income from business or profession. Therefore, we deem it not necessary to reproduce grounds of appeals filed by both the assessee s. ITA No: 293/Chny/2019: 3. The brief facts of the case are that, the assessee is engaged in the business of trading in shares, filed her return of income for the assessment year 2015-16 on 21.09.2015, declaring total loss of Rs. 3,59,77,647/-. The assessment has been completed u/s. 143(3) of the Act on 28.12.2017 and determined total loss at Rs. 3,45,69,885/-, by making addition towards disallowance of late payment charges u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in any manner in respect of any money borrowed or debt incurred (including deposits, claims or other similar rights or obligation) and includes any service fee or other charges in respect of the money borrowed or debit incurred or in respect of any credit facility which has not been utilized. From the definition of interest as per section 2(28A) of the Act, it is very clear that in order to bring any payment within the ambit of the term interest, there should be lender and borrower relationship. In this case, the assessee has paid some charges for delayed payment of amount towards purchase and sale of shares to a broker, without there being any contractual obligation or other terms and conditions applicable to borrowing. Therefore, we are of the considered view that, said payment cannot be considered as interest for the purpose of section 194A of the Act and consequently, the question of deduction of TDS does not arise. This view is fortified by various judicial precedence, including the Hon ble Calcutta High Court in the case of PCIT vs West Bengal Housing Infrastructure Development Corporation Ltd (Supra), where it has been clearly held that since, there is neither any borrowin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial evidence from ICICI Securities Ltd. 10. The Ld. Counsel for the assessee, referring to various documents submitted that, the details called for by the AO cannot be furnished at all. He further, submitted that there is no dispute that, she was trading in derivatives and derivative trading is outside the scope of speculative transactions as defined u/s. 43(5) of the Act. The Ld. Counsel for the assessee, further referring to Circular no. 03/2006 dated 27.02.2006, submitted that the Board itself has excluded trading in derivatives on recognized stock exchanges from the ambit of speculative transactions. Therefore, he submitted that the AO as well as the Ld. CIT(A) have clearly erred in assessing profit/loss under the head speculative income. In this regard, he relied upon certain judicial precedence on the principles of assessment of income including the decision of Hon ble Supreme Court in the case of Central India Spinning Weaving Manufacturing Co. vs Municipal Commissioner Wardah (AIR) 1958 SC 341. 11. The Ld. DR, on the other hand supporting the order of the Ld. CIT(A) submitted that, the assessee could not file any evidence to justify share trading in derivatives. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrived at a reasonable conclusion on the basis of ITR information and non-availability of information to verify the claim of the assessee. Therefore, we are of the considered view that, the issue needs to go back to the file of the AO for further verification to ascertain the nature of transactions. As regards, the arguments of the ld. Counsel for the assessee in light of various judicial precedence, we find that the ratios laid down by courts and tribunals cannot be read in isolation with context under which said ratio has been rendered. Further, there is no dispute with regard to ratio laid down by the court on a particular issue, however when facts are contradicting to the ratio laid down by the courts, then blindly judgment of any court or tribunal cannot be followed. Therefore, we reject case laws relied upon by the assessee. 13. In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that the issue needs to go back to the file of the AO and thus, we set aside the issue to the file of the AO and direct the AO to verify the issue in light of various evidences, including obtaining necessary evidence from broker, ICICI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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