M/s Total Securities Ltd Vs DCIT (ITAT Mumbai) – It was held by the Tribunal that penalty paid by the assessee as a registered broker to the stock exchange for not complying with various obligations/requirements is not in the nature of infringment of any law as envisaged in Explanation to section 37 and the same is allowable as deduction being the expenses wholly and exclusively incurred by the assessee for the purpose of its business. A similar view has been taken by the Chandigarh Bench of ITAT in the case of Master Capital Service Ltd. Vs. DCIT 23 SOT 69 (Chd.) Respectfully following the said decision of the co-ordinate Bench of this Tribunal, we delete the dis allowance made by the A.O. and confirmed by the ld. CIT(A) on account of penalty paid by the assessee to stock exchange and allow ground No. 2 of assessee’ s appeal.
Whether penalty paid by a registered broker is not a fine for any infringement of law and hence allowable ?- Yes
Whether admission fee paid by the assessee to stock exchange for acquiring membership is revenue? – yes
Whether salary paid to directors can be disallowed on the ground that the assessee has failed to prove the genuineness of services rendered when similar payments have been allowed in subsequent years ? – Tribunal referred the matter back to A.O.
Whether payments made to arbitragers and jobbers is covered by 194C and hence the same is not allowable if TDS is not deducted?- No, same is not covered u/s. 194C
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “I”
BEFORE SHRI D. MANMOHAN, V.P. AND SHRI P.M. JAGTAP, A.M.
ITA No. 7123/Mum/08
Assessment Year 2005-06
