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TMI Blog2016 (6) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the definition of ‘work’ in terms of section 194C of the Act as it does not involve any human intervention - Decided in favour of assessee Eligibility for getting rebate u/s. 88E - Held that:- We direct the Ld. AO to disallow the rebate u/s. 88E of the Act at 10% on the claim of the assessee and grant relief for the remaining amount. See Destiny Securities Ltd. Versus Deputy Commissioner of Income Tax [2016 (6) TMI 880 - ITAT KOLKATA] - I.T.A No.1065/Kol/2013 - - - Dated:- 1-6-2016 - Shri N. V. Vasudevan, JM Shri M. Balaganesh, AM For The Appellant: Shri M. D. Shah, AR For The Respondent: Shri Debasish Banerjee, JCIT, Sr. DR ORDER Per Shri M. Balaganesh, AM: This appeal by assessee is arising out of order of CIT(A)-VI, Kolkata vide Appeal No. 04/CIT(A)-VI/cir-6/11-12/Kol dated 18.02.2013. Assessment was framed by DCIT, Cir-6, Kolkata u/s. 143(3) of the Income tax Act, 1961 (hereinafter referred to as the Act ) for AY 2008-09 vide his order dated 31.12.2010. 2. The first issue to be decided in this appeal of assessee is as to whether the disallowance u/s. 40(a)(ia) of the Act could be made towards SMS charges to the extent of ₹ 6,22,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to by the assessee with these two parties and assessee had just consumed the SMS credits sold by the two parties. He further argued that the provisions of section 194C of the Act could be invoked only when there is a contract for carrying out any work which admittedly requires human intervention. In the instant case, the aforesaid two parties were providing only an interface between the stock broker s software and the customer wherein the net effect of the transactions in the contract notes gets automatically interfaced with Internet platform provided by the two parties and the SMS is generated to the customers without any element of human intervention. This is nothing but transmission of SMS. He placed reliance on the decision of the Coordinate bench of this Tribunal in the case of ITO Vs. Saha Agency in ITA No. 2453/Kol/2013 dated 20.05.2016, which in turn, placed reliance on the decision of Hon ble Calcutta High Court in the case of M/s. Stumm India, ITA No. 127 of 2009 dated 16.08.2010. With regard to the absence of human intervention, he placed reliance on the decision of the Coordinate bench of this Tribunal in the case of DCIT Vs. West Bengal State Electricity Distribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal ought not to have accepted the judgment and order of the CIT (Appeal) who has quashed the disallowance of deduction of ₹ 41,33,710/- and on account of tax deduction at source. The learned Tribunal has recorded the fact that the department has not been able to bring any material on record to show that the assessee has made the payment to the transporters in pursuance of contract for carriage of goods of the assessee and the question of deduction at source under section 194C does not and cannot arise. In the absence of evidence of payment made by the assessee to the transporters, the assessee cannot be saddled with the liability of deducting tax at source. Before us no other point has been urged nor it is said that the aforesaid fact finding is truthful without any basis whatsoever. Hence, we hold that the provisions of section 194C of the Act cannot be made applicable to the payments made to Air Transport Corporation (Assam) Ltd. 2.6. We find that the activity carried on in the instant case does not fall under the definition of work in terms of section 194C of the Act as it does not involve any human intervention. In this regard, reliance is placed on the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee claimed rebate u/s. 88e of the Act to the extent of ₹ 17,34,845/-. The Ld. AO restricted the same to ₹ 2,66,312/- on the basis of some calculations. The basis of assessee s claiming rebate u/s. 88E of the Act is given below: Computation of Tax rebate u/s. 88E Net Taxable Income 16,974,200.00 Net Tax payable before surcharge E.cess 5,092,260.00 Avg. rate of Tax 30.00% Gross Profit in share trading Sale of shares 21,555,959.00 Income from derivative trading 9,076,161.00 Increase in stock 3,662,800.04 34,294,920.04 Less: Purchase of shares 26,236,095.00 Demat charges 728.00 26,236,823.00 Profit from share trading 8,058,097.04 Tax at average rate 30% 2,417,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting in to modification of this calculation and decide accordingly. The total taxable income will be determined by the Assessing Officer after the appeal effect and accordingly the rebate u/s 88E will be given on the tax calculated accordingly as discussed above stating that STT related taxable income is 4.741% of the total taxable income as per the data. This ground of appeal is partly allowed. Aggrieved, assessee is in appeal before us on the following ground nos. 3 and 4: 3. For that the said CIT(A)-VI, Kolkata has failed and/or neglected to consider the total rebate of ₹ 17,34,845/- claimed by the appellant company u/s. 88e of the I. T. Act, 1961. 4. For that the Ld. CIUT(A)-VI, Kol is not justified in holding that the appellant is entitled to get only 4.741% of its total taxable income as rebate u/s. 88e of the I. T. Act, 1961 for the assessment year 2008-09. 3.3. The Ld. AR argued that the assessee is having composite business of trading in shares wherein it incurred loss of ₹ 10,17,337/-; income from stock broking, income from depository services, income from trading in derivatives and other income and after deducting expenses thereon, repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term of the decision of M/s. Millennium Stock Broking (P) Ltd., supra. 6. We have heard rival submissions and gone through facts and circumstances of the case. We find that the above facts are undisputed and only issue before us for our adjudication in this case is that how much percentage of disallowance of STT rebate is to be given. In view of the above facts as discussed above, the assessee s self transactions are to the tune of 41% and brokerage/clients transactions pertained to 59%. The proposition of law laid down by this Coordinate bench in the case of M/s. Millennium Stock Broking (P) Ltd., supra, if we go by that then at the best revenue can disallow rebate u/s. 88E of the Act qua brokerage income at 10%, both on indirect expenses as well as interest. We order accordingly. 3.5. Respectfully following the aforesaid decision, we direct the Ld. AO to disallow the rebate u/s. 88E of the Act at 10% on the claim of the assessee and grant relief for the remaining amount. Accordingly, ground nos. 3 and 4 raised by the assessee are partly allowed. 4. The ground no. 5 raised by the assessee is with regard to levy of interest u/s. 234D of the Act, which is consequenti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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