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TMI Blog2010 (2) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... hange. The AO disallowed u/s 40(a)(ib) of the Act, the amount paid by the assessee on account of Securities Transaction Tax. A disallowance was also made u/s 14A. On appeal, the first appellate authority granted part relief. The assessee has come up on further appeal on following ground : On the facts and in the circumstances of the case and in law, the Hon ble Commissioner of Income-tax (Appeals)-IV, Mumbai erred in confirming the action of the Assessing Officer 4(1)(1), Mumbai in adding ₹ 6,19,566 paid towards Securities Transaction Tax on behalf of clients. The appellant prays that the addition made by the A.O. and confirmed by the CIT(A) may please be deleted. 3. We have heard Mr. A.V. Sonde, learned counsel for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) No deduction under this section shall be allowed in, or after, the assessment year beginning on the 1st day of April, 2009.] Explanation. For the purposes of this section, the expressions, taxable securities transaction and securities transaction tax shall have the same meanings respectively assigned to them under Chapter VII of the Finance (No. 2) Act, 2004.] 5. Under the Finance (No.2) Act, 2004 in Chapter VII under the head Securities Transaction Tax, clause 100 reads as follows : 100. Collection and recovery of securities transaction tax.- (1) Every recognised stock exchange shall collect the securities transaction tax from every person, being a purchaser or seller, as the case may be, who enters into a taxable securiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee in this case is neither the purchaser nor the seller. He is merely a collecting agent of STT on behalf of the Government. Thus the assessee has both collected the amount and paid the same to the Government. The assessee being a broker has neither purchased shares on its own nor sold shares on its own. It was only an intermediary. Thus in our considered opinion, section 40(a)(ib) of the Act does not get attracted in this case nor section 88E benefit can be extended to the assessee in this case. Only when the purchaser or the seller claims a deduction of STT paid, then only 40(a)(ib) is attracted. The observations of the learned CIT(Appeals) that this is tax planning or a colourable device, in our considered opinion, is devoid of meri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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