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TMI Blog2013 (5) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the scope of definition of 'securities'. The services rendered for sale of mutual fund units, therefore, cannot be covered by the scope of Section 194 H. The definition has to be read in entirety and not in fragments, as suggested by the DR. The provisions of law are clear and admit no ambiguity. In any event, it was not even the case by any of the authorities below therefore to hold that the assessee did not have any tax withholding requirements so far as impugned payments for commission on sale of mutual fund units are concerned. In favour of assessee. - I.T.A. No.6039/Del/2012 - - - Dated:- 30-4-2013 - Shri U. B. S. Bedi And Shri T. S. Kapoor,JJ. For the Appellant : Ms. Sumana Sen, DR. For the Respondent : Shri G. N. Gup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the assessee was specifically asked to submit its submissions. In response to the query, the assessee submitted its reply which the Assessing Officer has incorporated in his order as under:- "In response to the show cause, the assessee has submitted vide its letter dated 13.10.2011 that the assessee is engaged in the business of procuring mutual fund units for the investors. The mutual fund units have been defined as securities as per clause (h) of sec. 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956). By getting the investment done in difference mutual funds like ABN, AMRO Mutual Fund, DSP Mutual Fund, Fidelity Mutual Fund, ICICI Prudential Mutual Fund ING Mutual Fund, Kotak Mutual Fund and Lotus Mutual Fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on payments to sub distributors, no TDS is being deducted for distribution of units of the schemes." 3. The explanation submitted by the assessee was however not accepted by the Assessing Officer and he made the addition of Rs. 69,28,562/- on which TDS was not deducted. 4. Aggrieved the assessee filed appeal before Ld CIT(A) and reiterated its submissions before Assessing Officer. It was submitted that ITAT Mumbai Bench in the case of SJ Investment Agencies (P) Ltd. v. ACIT in I.T.A. No. 3820 and in the case of M/s Jain Investment v. ITO in I.T.A. No.3663 has held that commission and brokerage does not include commission and brokerage earned or paid in the transaction of securities. The ld CIT(A) after going through the submissions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and argued that Assessing Officer had rightly rejected the claim of the assessee as the assessee had not deducted tax on commission paid to other persons. He further argued that the commission was paid for procurement of business for which section 194H is applicable. In view of the above, he argued that Ld CIT(A) had wrongly deleted the addition. 7. The Ld AR, on the other hand, relied upon the provisions of section 194H and argued that explanation to section 194H itself states that commission and brokerage does not include commission paid on the transactions of securities. Therefore, in view of the above, the Ld AR argued that assessee was not required to deduct tax on the payment of commission to sub brokers which was paid for procurem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to services rendered by one person on behalf of another ; second-services rendered in connection with purchase or sale; and, third - transaction of sales of any asset etc other than securities. She contends that it is only when third part of this definition is invoked that there will be any relevance of definition of 'securities', but since services rendered by the assessee are covered by the first part, i.e. rendering of services, this definition is not relevant. We are unable to see any merits in this objection either. The expression commission or brokerage includes payment for services for services rendered for, or in the course of, buying and selling of goods, or in relation to any transaction relating to any asset, valuable articl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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