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TMI Blog2012 (11) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... e prohibited u/s.37(1) of the Act. 2. It is, therefore, prayed that the above disallowance confirmed by the ld.CIT(A) may please be deleted." 3. The learned counsel for the assessee submitted that the commission expenses paid to the various parties was for business purpose only. He submitted that the list of parties to whom commission was paid along with their PAN and address was filed before the AO. He submitted that the AO has disallowed the commission paid on the only ground that there is a violation of the provision of the SEBI Regulations, 1992, and therefore the deeming provision of section 37(1) of the Act was applicable to the case of the assessee. He submitted that the issue is covered in favour of the assessee with the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious arguments made from both the parties, the Tribunal has held as under: "From the reading of this Bye-Law also, it is apparently clear that there is no prohibition in the payment of the commission to any other person introducing the client to the assessee provided it does not fall within Bye-Law 218(a)(i) to (vi). Clause (b) of Bye-Law 218 puts a restriction on the percentage of the sharing of brokerage with such persons who are not remisier or authorized clerk. To such person the assesses cannot pay brokerage more than 40% of the brokerage charged from the customers introduced by him. The facts of the case denote that the assessee has paid the commission to the extent of 50% of the brokerage while it cannot pay as per Regulation 218 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt it is permissible in accordance with Bye-Law 218 of the Ahmedabad Stock Exchange. Thus, this ground is allowed for statistical purpose." We being in agreement with the order of the Co-ordinate Bench of the ITAT, Ahmedabad in ACIT Vs. H. Nyalchand Financial Services Ltd. (supra) restore the issue in the grounds of the appeal of the assessee to the file of the AO with similar directions as contained in the order of the ITAT reproduced above and the AO shall re-decide the issue after considering Bye-law (218) of the Stock Exchange of Ahmedabad as well as Bye-laws of National Stock Exchange and to determine whether the commission paid exceeds the prescribed limits thereof of the brokerage received by the assessee from its clients and after ..... X X X X Extracts X X X X X X X X Extracts X X X X
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