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TMI Blog2015 (8) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of section 40(a)(ia) in the instant case. Suffice to say that disallowance made by the AO is not called for in the circumstances of the case, in the light of the decision of the ITAT (supra), which in turn was based upon the decision of Vector Shipping Services (P) Ltd.[2013 (7) TMI 622 - ALLAHABAD HIGH COURT] - Decided in favour of assessee. - ITA No. 1871/Mum/2013 - - - Dated:- 22-12-2014 - Shri D. Manmohan And Shri N.k. Billaiya ,JJ. For The Appellant: Shri K. Sivaram For The Respondent: Shri Pavan Kumar Beerla JUDGMENT Per D. Manmohan, V.P. This appeal by the assessee company is directed against the order passed by the CIT(A)-8, Mumbai and it pertains to AY 2006-07. 2. Following grounds were urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act 2012 inserting proviso to section 40(a)(ia) of the Act which is clarificatory in nature and inserted with a view to rationalize the provisions of disallowance, therefore the amendment should be applicable with retrospective effect. 3. Facts necessary for disposal of the appeal are stated in brief. The assessee is engaged in the business of share and stock broking. It debited a sum of `6,27,423/- to the Profit Loss Account under the head depository charges which are payable on account of services provided with regard to transactions in securities through Stock Exchange. According to the AO assessee ought to have deducted tax at source, under section 194C of the Act, with reference to payments made to the contractor. Assessee pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transports 136 ITD 23 and similar view was taken by the Hon'ble Allahabad High Court in the case of Vector Shipping Services (P) Ltd. 38 taxmann.com 77 (All) on which the SLP filed by the Revenue has been rejected. The learned counsel for the assessee placed detailed arguments which are referred to in his written submissions and also placed before us supporting case law to submit that reopening is based upon change of opinion and even otherwise there is no case for making a disallowance under section 40(a)(ia) both on merit as well as on the issue that the said section is applicable only when the amount is payable and not after payment is made. 5. On the other hand, the learned D.R. relied upon the orders passed by the Tax Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of 2014- dt. 24.06.2014) the Hon'ble Andhra Pradesh High Court has clarified the issue of interim stay granted by it in the case of Merilyn Shipping Transports (supra). We will like to reproduce the relevant part of the said order and same reads as under: 4. We are of the view that until and unless the decision of the Special Bench is upset by this Court, it binds smaller Bench and coordinate Bench of the Tribunal. Under the circumstances, it is not open to the Tribunal, as rightly contended by Mr. Narasimha Sarma, learned counsel, to remand on the ground of pendency on the same issue before this Court, overlooking and overruling, by necessary implication, the decision of the Special Bench. We simply say that it is not permissib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Tax Authorities have wrongly invoked provisions of section 40(a)(ia) in the instant case. We, therefore, set aside the orders passed by the Tax Authorities disallowing ₹ 6,27,423/-. In the light of the decision on merit it is not necessary for us to deal with the other aspects urged before us since they will be of academic importance. Suffice to say that disallowance made by the AO is not called for in the circumstances of the case, in the light of the decision of the ITAT (supra), which in turn was based upon the decision of the Hon'ble Supreme Court in the case of Vector Shipping Services (P) Ltd. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 22nd December, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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