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TMI Blog2019 (10) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... ply technology contained therein rather the fee is paid towards services rendered by BNP Paribas, Singapore for distribution of funds being units or shares on behalf of the assessee. The aforesaid payments made by the assessee in our considered view did not fall within the ambit of Article 3 and 4 of Indo-Singapore DTAA and thus cannot be categorized as Royalty payments or fees for technical services. These are payments made for managerial services rendered by BNP Paribas, Singapore to assessee for distribution of units of Mutual Fund and no technical know how or knowledge is made available to the assessee by the said BNP Paribas, Singapore which could enable assessee to apply the said technical know how contained therein. Moreover, the services were rendered abroad by payee and payments were also made by assessee by remitting payment abroad in foreign currency. Keeping in view aforesaid provisions/clauses as are contained in India-Singapore DTAA, these payments cannot be held to be taxable in India and consequently assessee was not required to deduct income-tax at source u/s 195 of the 1961 Act while remitting payment abroad to said BNP Paribas, Singapore. It is well esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tfully following aforesaid decision of the ITAT, Chennai Benches, we dismiss this ground raised by Revenue . While dismissing this ground raised by Revenue, we are guided by principles of judicial discipline and principles of consistency in taxingstatute as laid down by Hon ble Supreme Court in the case of Radha Soami Satsang v. Satsang [ 1991 (11) TMI 2 - SUPREME COURT] Disallowance of expenses - expenses incurred by assessee in the nature of repairs and improvement made to leasehold building not owned by assessee which was used for office premises - Allowable revenue expenditure - HELD THAT:- Each year is a separate unit and the facts may vary from year to year. CIT(A) followed the decision of tribunal for earlier year viz. ay: 2008-09. We have observed that detailed investigation of each of these expenses were not done by authorities below to arrive at decision whether benefit of enduring nature was derived by assessee by incurring these expenses .We are inclined to restore this issue back to file of the AO to look into nature of each of these expenses and then to arrive at decision whether these expenses are to be capitalized or to be held to be revenue in nature, after c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e before the tribunal due to low tax effect. The ld.CIT-DR fairly admitted that these two appeals filed by Revenue are not covered/hit by various exceptions as applicable to aforesaid CBDT Circular and hence both these appeals may be dismissed owing to low tax effect as these appeals are not maintainable before the tribunal. The learned Counsel for the assessee also submitted that both these appeals filed by Revenue for ay: 2013-14 and 2014-15 are covered by aforesaid CBDT circular and can be dismissed owing to low tax effect. After hearing both the parties and perusing material on record, we dismiss both these appeals filed by Revenue being ITA No. 467 468/Chny/2018 for ay : 2013-14 and 2014-15 respectively owing to low tax effect being covered by CBDT circular No. 17/2019 dated 08.08.2019. We order accordingly. 3. In the result, both the appeals in ITA Nos.467 468/Chny/2018 filed by Revenue for ay: 2013-14 and 2014-15 respectively are dismissed owing to low tax effect. We order accordingly. 4. Now, we will take up cross appeals for ay:2011-12 viz. ITA Nos.419/Chny/2018 filed by assessee ITA No.465/Chny/2018 filed by Revenue respectively. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in deleting the disallowance of payment made to Fund Quest u/s.40(a)(ia) of the Act stating that the said payment was not in the nature of royalty falling within the ambit of provisions of section 9(1)(vi) of the Act. 3.2 The ld. CIT(A) relied on the decision of the ITAT in assessee's own for A.Y. 2008-09 in ITA.No.1774/Mds/2012 dated 19.07.2013. The above decision of the ITAT was not accepted by the department and appeal to the High Court has been filed against the deletion of disallowance of payment made to Fund Quest. 4.1 The ld. CIT(A) has erred in deleting the disallowance of expenses in the nature of repairs / improvements made to lease hold rented premises treating it as revenue in nature. 4.2 The ld. CIT(A) has failed to appreciate the judgement of The Hon'ble Supreme Court in Ballimal Naval Kishore and Anr. v CIT in 224 ITR 414 and the Hon'ble Calcutta High Court in the case of M/s.Humayun Properties Ltd 44 1TR 73, held that renovation to make halls more attractive and comfortable by way of replacement of furniture, sanitary fittings, electrical installation, etc., are only capital expenditure. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 976 which stipulated that these payments shall be taxable only in India irrespective of the place where the services are rendered . The aforesaid explanation provided as under: [Explanation.-For the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) and shall be included in the total income of the non-resident, whether or not,- (i) the non-resident has a residence or place of business or business connection in India; or (ii) the non-resident has rendered services in India.] Thus, the AO brought the aforesaid payments made by assessee to BNP Paribas Investment Singapore Limited, Singapore without deduction of income tax at source to tax keeping in view provisions of Sec.40(a)(i) of the 1961 Act read with Section 195 of the 1961 Act, vide assessment order dated 24.03.2014 passed by the AO u/s 143(3) of the 1961 Act. 7. Aggrieved by an assessment order dated 24.03.2014 framed by AO u/s 143(3) of the 1961 Act, the assessee filed fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of the Relevant Documents. It is acknowledged that pursuant to this Agreement, BNPP IP Singapore's distribution of the Fund may be performed directly or indirectly by way of commercializing foreign domiciled collective investment schemes that invest as feeders into the Fund. b. Issue of Units: Sundaram hereby agrees to procure, in accordance with the terms of the Prospectus and Trust Deed, or Articles as the case may be, the issuance of the Units to BNPP IP Singapore's clients to the extent that the distribution is effected in accordance with the terms of the Relevant Documents and hereof and subscriptions for Units are effected in accordance with the Relevant Documents. BNPP IP Singapore may use all legally available means, including electronic media (e.g. Internet, website, email) in order to distribute the Units in accordance with this Agreement. 3. DOCUMENTATION a. Statutory Reports: Sundaram shall provide or make available to BNPP IP Singapore the prospectus, any simplified Prospectus (as applicable), periodic financial reports, notices convening unit holders' meetin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o such of its clients in compliance with all applicable laws and regulations, including (but not limited to) regulations in any relevant jurisdiction relating to the marketing and selling of the Units by way of public offers and private placements, the terms of this Agreement and the Relevant Document, BNPP IP Singapore acknowledges the restrictions on sales in countries where the Fund is not authorized for public sale, such as the United States, and agrees to comply with such restrictions. BNPP IP Singapore shall not sell or offer to sell any Units in the United States, its territories or possessions, or remit any Fund related documentation to a US Person , as such term is defined in Regulation S of the United States Securities Act of 1933, as amended, except in connection with transactions exempt from registration under the Securities Act of 1993. Any failure to comply with these restrictions may constitute a violation of the US Securities Laws. Moreover, in the event of subscriptions made by or on behalf of politically exposed persons, BNPP IP Singapore will ensure that due diligence on such clients (including but not limited to for the prevention of corrupti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal or consultancy nature (including the provision of such services through technical or other personnel) if such services : (a) are ancillary and subsidiary to the application or enjoyment of the right, property or information for which a payment described in paragraph 3 is received ; or (b) make available technical knowledge, experience, skill, know-how or processes, which enables the person acquiring the services to apply the technology contained therein ; or (c) consist of the development and transfer of a technical plan or technical design, but excludes any service that does not enable the person acquiring the service to apply the technology contained therein. For the purposes of (b) and (c) above, the person acquiring the service shall be deemed to include an agent, nominee, or transferee of such person. 6.9 From a perusal of Article 12(4)(a) of the India-Singapore Double Taxation Avoidance Agreement (DTAA), it is seen that 'fees for technical services' as used in that Article means any services of managerial, technical or consultancy in nature if such services are ancillary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of each case. 6.12 The suitability Clause of the Distribution Agreement make it abundantly clear what exactly are the services rendered by BNP IP Singapore to appellant. The Clause reads as under: i. Suitability : BNPP IP Singapore confirms that it has put in place and implements client suitability policies and procedures in accordance with applicable law, regulation and market practice to ensure, among other things, that: (i) BNPP IP Singapore's individual investment advisers are properly trained to know its clients and understand the investment product they recommend to such clients; (ii) Any advice given by BNPP IP Singapore regarding investments in any sub-fund of the Fund is reasonably suitable for its clients, by matching the risk return profile of the subfund with relevant information on the client (such as education level, source of income or employment history, net-worth, financial market knowledge, investment experience, investment objectives and risk tolerance level); (iii) All relevant material information is provided to BNPP IP Singapore's clients to help ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Government before that date. Explanation 2.-For the purposes of this clause, fees for technical services means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head Salaries . 6.15 In the case on hand, the recipients of the fees for technical services rendered services outside India. Nevertheless, the relevant Explanation below; Section 9(2) reads as follows: Explanation.- for the removal of doubts, it is hereby declared that for the purposes of this section, income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) and shall be included in the total income of the non-resident, whether or not,--- (i) the non-resident has a residence or place of business or business connection in India; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as utilized in India. This interpretation was not in accordance with the legislative intent that the situs of rendering service in India is not relevant as long as the services are utilized in India, Therefore, to remove doubts regarding the source rule, an Explanation was inserted below sub-section (2) of section 9 with retrospective effect from 1st June, 1976 vide Finance Act, 2007. The Explanation sought to clarify that where income is deemed to accrue or arise in India under clauses (v), (vi) and (vii) of sub-section (2) of section 9, such income shall be included in the total income of the non-resident, regardless of whether the non-resident has a residence or place of business or business connection in India. However, the Karnataka High Court, in a recent judgement, in the case of Jindal Thermal Power Company Ltd, vs DCTT [TDS] has held that the Explanation, in its present form, does not do away with the requirement of rendering of services in India for any income to be deemed to accrue or arise to a non-resident under section 9. It has been held that on a plain reading of the Explanation, the criteria of rendering services in India and the utiliza ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic legislation under the bilateral agreements. 24. The two principles, namely, Situs of residence and Situs of source of income have witnessed divergence and difference in the field of international taxation. The principle Residence State Taxation gives primacy to the country of the residency of the assessee. This principle postulates taxation of worldwide income and worldwide capital, in the country of residence of the natural or juridical person. The Source State Taxation rule confers primacy to right to tax to a particular income or transaction to the State/nation where the source of the said income is located. The second rule, as is understood, is transaction specific. To elaborate, the source State seeks to tax the transaction or capital within its territory even when the income benefits belongs to a non-residence person, that is, a person resident in another country. The aforesaid principle sometimes is given a different name, that is, the territorial principle. It is apt to state here that the residence based taxation is perceived as benefiting the developed or capital exporting countries whereas the source based taxation protect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar to acts intended to enforce internal legal provisions abroad. [See the Introduction in Klaus Vogel on Double Taxation Convention., South Asean, Reprint. Edition (2007)]. Therefore, deduction of tax at source when made applicable, it has to be ensured that this principle is not violated. 6.20 Coming to the instant case, it is evident that fees for technical services have been paid to non-resident, and, it is also seen that the payment made would be covered under the expression Fees for Technical Services as contained in section 9(1)(vii)(b) read in conjunction with the Explanation there under. Since the fees for technical services paid by the appellant was in respect of services utilized in a business carried on in India, the fees payable is subject to tax as per the provisions of Sec.9(1)(vii)(b). Accordingly, I find that there is territorial nexus with India, as far as the services rendered by the non-residents to the business of the appellant is concerned. 6.21 The Hon'ble Supreme Court of India, in the case of Transmission Corporation of Andhra Pradesh Ltd. Vs CIT (SC)(239 ITR 587) declared that any person making payments to a non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and income-tax has to be deducted at source by assessee before remitting payment to BNP Paribas. He drew our attention to para 6.9 , 6.13 , 6.19 and 6.20 of the appellate order passed by Ld.CIT(A) and submitted that in view of the decision in the case of M/s.Transmission Corporation of A.P Ltd v. CIT reported in (1999) 239 ITR 587 (SC) when the payment are made to non-resident, the assessee ought to have deducted income-tax at source before remitting payment to BNP Paribas. The learned CIT-DR submitted that while distributing investment products of the assessee, BNP Paribas is rendering services as it has technical expertise in mobilizing funds and hence these are technical services. 8.3. The learned counsel for the assessee submitted in rejoinder that additions had been made under the head Fee for Technical Services and the payments were not in the nature of Royalty. It was submitted that these services did not make available any technical knowledge or knowhow to the assessee and as per Singapore DTAA , it is required that the technical know-how should be made available which could be applied to come within the ambit of deduction of income-tax at s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of Indo-Singapore DTAA and thus cannot be categorized as Royalty payments or fees for technical services. These are payments made for managerial services rendered by BNP Paribas, Singapore to assessee for distribution of units of Mutual Fund and no technical know how or knowledge is made available to the assessee by the said BNP Paribas, Singapore which could enable assessee to apply the said technical know how contained therein. Moreover, the services were rendered abroad by payee and payments were also made by assessee by remitting payment abroad in foreign currency. Keeping in view aforesaid provisions/clauses as are contained in India-Singapore DTAA, these payments cannot be held to be taxable in India and consequently assessee was not required to deduct income-tax at source u/s 195 of the 1961 Act while remitting payment abroad to said BNP Paribas, Singapore. It is well established principle in tax-matters that taxing statute provisions under domestic law or treaty provisions whichever are beneficial to the assessee shall be applicable. The treaty provision in the instant case contains make available clause, while BNP Paribas did not made available any techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s invested substantial amounts in the Mutual Funds which were held as Long Term Investments, the total value of which as on 31.03.2010 was ₹ 13.75 crores which increased during the year to ₹ 14.81 crores as on 31.03.2011. The AO observed that assessee was engaged in substantial purchase and sale of current investments viz. Mutual Funds. The AO observed that total investments as on 31.03.2010 was ₹ 25.58 crores which stood at ₹ 21.31 crores as on 31.03.2011. The AO observed that assessee is actively engaged in the field of investment in shares and Mutual Funds . The AO observed that total assets of the assessee as on 31.03.2011 was ₹ 65.02 Crs. The assessee has also contended before AO that out of total investments of ₹ 21.30 crores held by assessee as on 31.03.2011, no dividend was received on investments to the tune of ₹ 17.50 crores and hence such investments should not be considered for computing disallowance u/s 14A read with Rule 8D of the 1962 Rules. The AO rejected the contentions of the assessee that no expenses were incurred by the assessee for earning of an exempt income. The AO observed that part of administrativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.Maxopp Investment Ltd v. CIT (supra), the purposes for which shares/units in Mutual Funds are held are irrelevant and disallowance of expenditure incurred in relation to earning of an exempt income is to be made keeping in view provisions of Section 14A of the 1961 Act. 12. The ld.Counsel for the assessee on the other hand submitted that short term capital gains are subject to Income-tax and hence all such investment in which short term capital gains arose should be excluded while computing disallowance of expenses u/s 14A of the 1961 Act. The assessee was confronted by the Bench with decision of Hon ble Supreme Court in the case of M/s. Maxopp Investment Ltd v. CIT (2018) 402 ITR 640(SC). 13. We have considered rival contentions and have perused the material on record including cited case laws We have observed that assessee is an asset management company for mutual fund. The assessee has investments in mutual fund and other investments, the assessee has received dividend income from mutual fund to the tune of ₹ 92,63,481/- which was clamed as an exempt income u/s.10 of the 1961 Act. The assessee has claimed that he has not incurred any ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y fee made to Fund Quest u/s.40(a)(i) of the Act. It was observed by the AO that assessee had made payment in foreign currency to M/s.Fund Quest towards of sub-advisory fees . The assessee submitted before AO that services were rendered outside India hence same will not fall under the purview of Section 195 of the 1961 Act as per CBDT circular number 786. The assessee also relied upon Indo- French DTAA and submitted before AO that since no technical knowledge was made available to the assessee and hence aforesaid income is not chargeable to income-tax in India which is a pre-requisite for taxing the fee for the technical services and hence no income-tax was deducted at source while making remittance in foreign currency to above party. 14.2 The AO observed that said M/s.Fund Quest has rendered following services vide Article III of the agreement entered into by assessee with said Fund Quest: The Investment Advisor shall give advice, extend assistance, render services and furnish information, data and reports in respect of the Account to the Manager or to such other entity as the Manager may direct, in the manner, form and when required by them i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E 13 - Royalties and fees for technical services and payments for the use of equipment - 1. Royalties, fees for technical services and payments for the use of equipment arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting State. [2. However, such royalties, fees and payments may also be taxed in the Contracting State, in which they arise and according to the laws of that Contracting State, but if the recipient is the beneficial owner of these categories of income, the tax so charged shall not exceed 10 per cent of the gross amount of such royalties, fees and payments.] 3. The term royalties as used in this article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, or films or tapes used for radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience . 14.3 The AO relied upon the decision of Mumbai-tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income of the non-resident, whether or not,- (i) the non-resident has a residence or place of business or business connection in India; or (ii) the non-resident has rendered services in India.] 14.5 Thus, the AO disallowed the aforesaid payment made by assessee vide foreign remittance of ₹ 15,51,269/- to Fund Quest , France without deducting of Income-tax at source which stood added by the AO to the income of the assessee as per provisions of Section 40(a)(i) read with section 195 of the 1961 Act,vide assessment order dated 24.03.2014 passed by the AO u/s 143(3) of the 1961 Act 15 The assessee being aggrieved by an assessment framed by the AO filed first appeal before the Ld.CIT(A), who was pleased to allow appeal of the assessee by following decision of the tribunal in assessee s own case in ITA No.1774/Mds/2012 dated 19.07.2013 for ay: 2008-09, wherein it was held by the Ld.CIT(A) as under: .5.1 The AO found that the appellant made payments towards sub-advisory fees to Fund Quest, France, for services rendered abroad. The appellant submitted that Fund Quest compiles the research ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vention, model, design, secret formula or process or trade mark or similar property ; (ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property ; (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property ; (iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill ; [(iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB;] (v) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films ; or (vi) the rendering of any services in connection with the acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT-DR has brought to the notice of the Bench that an appeal against aforesaid appellate order passed by ITAT was filed by Revenue before Hon ble Madras High Court u/s 260-A of the 1961 Act which is pending for disposal before Hon ble Madras High Court. The learned counsel did not controvert the present status of appeal filed by Revenue with Hon ble Madras High Court which is stated to be pending for disposal. The Chennai Tribunal in aforesaid order in assessee s own case for ay: 2008-09, held as under: iii. The third ground in the appeal relates to dis-allowance u/s. 40(a)(ia). The assessee is into investment business. The assessee has entered into an agreement with M/s. Fund Quest (France) on 13-07-2007, to provide investment advice for the investments to be carried outside India. M/s. Fund Quest has been providing advisory services. For the services rendered, the assessee paid fee in accordance with mutual agreement. In the course of providing advisory services, M/s. Fund Quest is providing certain data of the companies which facilitates the assessee to make investment decisions. The information provided to the assessee by Fund Quest in the form of database i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of the CIT(Appeals) on the issue. Since, payments made to M/s. Fund Quest are not in the nature of Royalty and the services were rendered abroad, no part of income had accrued or arisen in India. The assessee is not liable to deduct tax at source on the payments so made. The findings of the CIT(Appeals) on this issue are set aside and this ground of appeal of the assessee is allowed. As is reproduced above tribunal order in assessee s own case for ay: 2008-09, we have observed that issues concerning payments made by assessee by remitting abroad in foreign currency to the same party Fund Quest, France was decided by Chennai- tribunal in assessee s own case for ay: 2008-09 in ITA No. 1774/Mds/2012 by holding in favour of the assessee as reproduced above and Respectfully following aforesaid decision of the ITAT, Chennai Benches, we dismiss this ground raised by Revenue . While dismissing this ground raised by Revenue, we are guided by principles of judicial discipline and principles of consistency in taxingstatute as laid down by Hon ble Supreme Court in the case of Radha Soami Satsang v. Satsang (1992) 193 ITR 321(SC). We order accordingly. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpense which are to be capitalized and depreciation u/s 32 of the 1961 Act is to be allowed , vide assessment order dated 24.03.2014 passed by the AO u/s 143(3) of the 1961 Act. 20. Being aggrieved by an assessment framed by AO u/s 143(3) of the 1961 Act, the assessee filed first appeal with ld.CIT(A) who was pleased to allow the appeal of the assessee vide appellate order dated 30.11.2017 by following the decision of the tribunal in the assessee s own case in ITA No.1774/Mds/2012 dated 19.07.2013 for ay: 2008-09, wherein it was held by learned CIT(A) as under: 7.3 The appellant submitted that this issue was decided in favour of the appellant in its own case by the Hon'ble ITAT vide order in ITA No.1774/Mds/2012 dated 19.07.2013 for the A.Y. 2008-09 which is as follows: Extracted from ITAT s order dated 19.07.2013 iv. The fourth ground of appeal of the assessee relates to repairs of lease-hold premises. The assessee has placed on record at Page No. 42 of the Paper Book, the nature of work carried out by the assessee in the leased office premises. The assessee has claimed the expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of revenue expenditure in regard to the said expenditure. Consequently, the depreciation as allowed by the Assessing Officer on the said expenditure which has been capitalized would stand reversed. Whether the expenditure incurred on renovation of a building is capital or revenue, is a question of fact. The same has to be decided on the facts of each case. We find that the facts of the case of the assessee are similar to the one adjudicated by the Tribunal mentioned above. The civil work relates to the interior decoration and creation of the office atmosphere. Respectfully following the decision of the coordinate bench of the Tribunal, this ground of appeal of the assessee is allowed and the expenditure incurred by the assessee in modifying the interiors of a building into office are held to be revenue in nature. 7.4 I have considered the findings of the AO and the written submissions made by the AR. Respectfully following the above decision of the Hon'ble ITAT, the AO is directed to treat the expenditure as revenue in nature since the facts related to this issue remain the same. The appellant suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of each of these expenses incurred by it to enable authorities to arrive at decisions whether the expenses were incurred on capital field or were revenue in nature. Needless to say that the AO shall provide with proper and effective opportunity of heard to the assessee in accordance with principles of natural justice in accordance with law in the denovo set aside assessment proceedings.This ground of appeal filed by Revenue is allowed for statistical purposes. We order accordingly. 23. The next issue raised by Revenue in its appeal concerns itself with payment made towards commission and brokerage to mutual fund distributors without deduction of income-tax at source u/s 194J of the 1961 Act . It is claimed that this issue is covered by decision of tribunal in favour of the assessee in assessee s own case in ITA No. 1774/Mds/2012 for ay: 2008-09 , vide appellate order dated 19.07.2013, wherein Ld.CIT(A) vide appellate order dated 30.11.2017 has held as under: Issue No.5: Disallowance u/s.194J of Commission Brokerage paid : 2011-12 2012-13; 8.1 The appellant had made commission payments to mutual fund distributors for prom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities ; ii) xxxxxxxxxxxxxxxxxxxx (iii) the expression securities shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956) ; (iv) where any income is credited to any account, whether called Suspense account or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly.] Section 2(h) of the Securities Contracts (Regulation) Act, 1956 defines securities as : 2(h) securities include- (i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate; (ia) derivative; (ib) units o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble ITAT, the AO is directed to delete the addition made u/s 40(a)(ia) on account of payments made to mutual fund distributors for the assessment years under consideration, The appellant succeeds on this ground for the A.Ys. 2011-12~ 2012-13. Both the rival parties have agreed before the Bench that this issue is squarely covered by decision of the tribunal in assessee s own case in ITA No.1774/Mds/2012 dated 19.07.2013 for ay: 2008-09. However, it was submitted by Ld.CIT-DR that Revenue has not accepted the aforesaid decision of the tribunal and appeal is filed by Revenue before Hon ble Madras High Court. This position could not be controverted by learned counsel for the assessee. Thus, after considering the entire material on record, we decide this issue in favour of the assessee by following the decision of the tribunal in assessee s own case in ITA No.1774/Mds/2012 dated 19.07.2013 for ay: 2008-09 by confirming the appellate order passed by learned CIT(A) and dismiss this ground raised by Revenue . While dismissing this ground raised by Revenue, we are guided by principles of judicial discipline and principles of consistency in taxi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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