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TMI Blog2011 (9) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No. 5430/Mum/2010 - - - Dated:- 29-9-2011 - SHRI T R SOOD, AM SHRI VIJAY PAL RAO, JM For the Appellant : Shri Deepak H Padachh For the Respondent : Shri Alexender PER VIJAY PAL RAO, JM These are cross appeals directed against the order dated 20th April 2010 of the CIT(A) for the Assessment Year 2007-08. 2 In appeal ITA No. 3339/Mum/2010, the assessee has raised the following effective grounds: i)On the facts and in the circumstances of the case and i law, the ld CIT(A) erred in confirming the addition of ₹ 10,91,135/- made by the Assessing Officer to the income of the appellant by way of disallowing certain expenditure alleged to have been incurred relating to exempt income invoking the provisions of sec. 14A r.w r 8D. ii) The ld CIT(A) erred in holding that levy of interest u/s 234B of the I T Act is not appealable. The appellant denies its liability for such interest. 3 Ground no.1 is regarding disallowance u/s 14A. 4 We have heard the ld AR of the assessee and the ld DR and considered the relevant material on record. The ld AR has pointed out that the assessee has earned dividend income of ₹ 1,40,535/- on the shares h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares and interest on the same is allowable as business expenditure u/s 36(1)(iii) of the Act. In the facts of the case, the turnover of the share trading cannot be a basis for disallowance of interest expenditure; because the dividend income earned is only on that part of the shares, which are held as stock-in-trade. Even otherwise, it is clear from the record that the assessee s own fund is much more than the average stock-in-trade of the assessee; then, in our opinion, no disallowance of interest expenditure can be made u/s 14A. 6 Similar view has been taken by the coordinate Bench of the Tribunal in the case of Yatish Trading Co P Ltd (supra) in para 36 37 as under: 36. As held by the Hon. Jur i sdict ional High Cour t in the case of Godrej and Boyce Manufactur ing co. l td Mumbai (supra), sect ion 14A is impl ici t wi thin i t a not ion of apport ionment in the cases where the expendi ture is incur red for the composi te/indivi sible business which receives taxable and nontaxable income. However , the pr inciple of apport ionment is appl icable only in the cases where i t is not possible to determine the actual expendi ture incur red in relat ion to the income not fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or investment . Accordingly, we decide this issue in favour of the assessee and against the revenue. 7 Ground no.2 regarding levy of interest u/s 234B. 8 Since levy of interest u/s 234B is mandatory and consequential in nature; therefore, no specific finding is required. ITA No.5430/Mum/ 2010 (by the revenue) 10 The revenue has taken the following grounds in this appeal: i) On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in deleting the disallowance of ₹ 24,03,648/- made u/s 40(a)(ia) in respect of VASAT, Transaction and Lease-line chares paid to Stock Exchange, without appreciating the facts that these were composite charges for professional and technical services rendered by the stock exchange to its members and the assessee ahs failed to deduct TDS thereon. ii) On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in deleting the addition u/s 40(a)(ia) of ₹ 1,58,36,356/- made on account of payments to arbitragers/jobbers for non deduction of TDS. iii) On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in deleting the addition made on account of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the outset, we find that identical issue has been decided in favour of the assessee by the Tribunal in assessee s own case for the Assessment Year 2005-06 and 2006-07 while deciding the appeal of the revenue in ITA No.214 5528/Mum/2009 vide order dated 30th Nov 2010 in para 9 as under: 9. In the case of M/s. Asset Securities Pvt. Ltd. (supra), the Tribunal has examined the nature of the payments made to the Jobbers Arbitragers and held as under:- The facts show that there were separate joint ventures entered into by the assessee with several jobbers / arbitragers and payments have been made to them under such agreements and the assessee s share in the profits has been taken to the Profit and Loss Account. In these circumstances the provisions of section 194C are not attracted because in essence and substance the amounts paid to the jobbers or arbitragers did not in reality represent the expense of the assessee company but represented payment of the share of the jobbers / arbitragers under the agreement entered into with them. In such a case the assessee is right in saying that there was no question of deducting any tax at source. The above facts also establish that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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