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TMI Blog2011 (2) TMI 1427X X X X Extracts X X X X X X X X Extracts X X X X ..... bt that Mutual Funds are categorised as securities under Securities Contract (Regulation) Act. From the details placed, we are convinced that the sub-brokerage paid is connected with the services rendered in the course of buying and selling of units of Mutual Funds or in relation to transactions pertaining to Mutual Funds and as per the provisions of section 194H Explanation (i) these are not covered by the provision for deduction of tax at source. There is nothing on record to indicate that the sub-brokerage is paid for any other services other than relating to securities. The A.O. also accepts that the brokerage received by the assessee is not covered by TDS whereas he was of the opinion that the sub-brokerage paid is covered by the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41/- was either paid in the course of buying or selling of securities or in relation to any transaction relating to securities was paid for just introducing the clients. 3. The briefly stated facts are that the assessee is a company engaged in the business of mutual fund distribution and investment agent. The return of income declaring total income at ₹ 39,56,535/- was filed on 27.11.2006. The same was processed under section 143(1) of the I.T. Act. Subsequently the case was selected for scrutiny and finally the assessment was completed under section 143(3) on 28.11.2008 by determining total income at ₹ 6,97,13,580/-. While determining this income, the Assessing Officer made disallowances on account of sub-brokerage amountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjection supports the order of the CIT(A). 5. We have heard the learned D.R. and the learned counsel for the assessee and examined the paper book placed on record containing 53 pages. 6. After considering the arguments and submission we agree with the findings of the CIT(A). The provisions of section 194H are as under: - 194H. Any person, not being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of June, 2001, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Funds. From the details placed on record, we are convinced that the sub-brokerage paid is connected with the services rendered in the course of buying and selling of units of Mutual Funds or in relation to transactions pertaining to Mutual Funds and as per the provisions of section 194H Explanation (i) these are not covered by the provision for deduction of tax at source. There is nothing on record to indicate that the sub-brokerage is paid for any other services other than relating to securities. The A.O. also accepts that the brokerage received by the assessee is not covered by TDS whereas he was of the opinion that the sub-brokerage paid is covered by the provisions. We are unable to understand this logic of the A.O. For these reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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