Income Tax Appellate Tribunal - Kolkata
Dcit,Cc2(1),Kolkata, Kolkata vs Abhinandan Stock Broking Private ... on 15 April, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
KOLKATA 'A' BENCH AT KOLKATA
Before
SHRI RAJESH KUMAR, ACCOUNTANT MEMBER
&
SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER
ITA No(s). 3289/KOL/2025
Assessment Year(s)2022-23
DCIT,CC-2(1),Kolkata Abhinandan Stock Broking
Vs. Private Limited
(Appellant) (Respondent)
PAN: AAICA8362N
Appearances:
Department represented by :Ruchika Sharma, SR. DR.
Assessee represented by :Akkal Dudhwewala, FCA.
Date of concluding the hearing : 24-March-2026
Date of pronouncing the order : 15-April-2026
ORDER
PER RAJESH KUMAR, ACCOUNTANT MEMBER:
The appeal filed by the Revenue is directed against the order dated 15.10.2025 of the Commissioner of Income-tax (Appeals) - 26, Kolkata [hereinafter referred to as the "ld. CIT(A)"] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as the "Act") for the assessment year 2022-23.
2. The issues raised in Ground Nos. 1 to 3 are directed against the order of the ld. CIT(A) deleting the disallowance of Rs.5,18,50,157/- made by the ld. AO u/s 80GGB of the Act.
3. The facts in brief are that, the assessee had filed its return of income u/s 139(1) of the Act declaring total income of Rs.5,56,06,686/-. The assessee had, inter alia, claimed Page | 2 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
deduction in respect of political donation by way of electoral bonds of Rs.5,50,00,000/- u/s 80GGB of the Act. The ld. AO was of the opinion that the Hon'ble Supreme Court in the case of ADR vs UOI (159 taxmann.com 383) had struck down the Electoral Bond Scheme and had also held the amendment made by the Companies Act, 2017 removing the cap on political donation, which earlier was 7.50% of the average net profits to be unconstitutional. According to the ld. AO, the assessee was entitled to deduction u/s 80GGB to the extent of 7.50% of the average of last three years' profits which worked out to Rs.31,49,843/- and thus disallowed the balance claim of Rs.5,18,50,157/- [Rs.5,50,00,000 (-) Rs.31,49,843].
4. In the appellate proceedings, the ld. CIT(A) deleted the addition made by the ld. AO by taking into account the arguments and submissions of the assessee by observing and holding as under:-
"3.3 I have carefully considered the submissions of the appellant and the findings recorded by the AO for making the impugned disallowance. The issue in dispute is narrow in compass. The admitted facts are that, the appellant had purchased electoral bonds of Rs.5,50,00,000/- during the year which were encashed by registered political party and accordingly the appellant had claimed deduction for the aforesaid amount u/s 80GGB of the Act. The purchase of electoral bonds is supported by relevant contemporaneous documents which are not in dispute. It is noticed that the average profits of the appellant for the last three years was Rs.4,19,97,900/-. It was AO's view that the appellant could have legally donated only 7.5% of the average net profit, in terms of Section 182 of the Companies Act, 2013 which worked out to Rs.31,49,843/- and therefore the excess donation of Rs.5,18,50,157/- was made to the political party in violation of the provisions of Companies Act, 2013 and thus such excess contribution was held to be not allowable as deduction u/s 80GGB of the Act. This analogy of the AO is found to emanate from the Page | 3 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
judgment of the Hon'ble Supreme Court in the case of ADR Vs UOI (supra) wherein the amendment made to Section 182 of Companies Act, 2013 by the Amendment Act of 2017 removing the cap of 7.5% and permitting companies to make donations of any amount(s) was held to be unconstitutional. The AO was of the view that this judgment had retrospective operation.
3.3.1 In order to adjudicate this issue, it is first relevant to take note of the provisions of Section 80GGB, which is in dispute in the present case. The relevant provisions read as under: -
"In computing the total income of an assessee, being an Indian company, there shall be deducted any sum contributed by it, in the previous year to any political party or an electoral trust:
Provided that no deduction shall be allowed under this section in respect of any sum contributed by way of cash."
3.3.2 Section 80GGB of the Act does not prescribe any ceiling or maximum limit for claiming deduction under Chapter VIA of the Act. The only condition precedent is that the contribution shall be made to a political party and cannot be made in cash. It is seen that, the donation of Rs.5,50,00,000/- was made by the appellant through the Electoral Bond Scheme, 2018 for which the payment was made through proper banking channel and the bonds were utilized by registered political party. There is merit in the appellant's contention that as the condition laid down in Section 80GGB was fulfilled, the AO could not have interfered with the deduction of Rs.5,50,00,000/- claimed by the company. I find that, there is no stipulation laid down in Section 80GGB that the political donation has to be within the limits stipulated in Section 182 of the Companies Act, 2013 or for that matter under any other law. The purported restriction on donation to political party at 7.5% of the average net profit for last three years was provided in the Companies Act, 2013 (before amendment) and not in the Income Tax Act, 1961. If in case, a company has violated the stipulation laid down in Section 182 of Companies Act, 2013, necessary consequences under the Companies Act, 2013 would follow and such violation will not vitiate the allowability of deduction claimed under Section 80GGB of the Act, due to absence of any express provision stating so. I find that, unlike Section 80G, the Legislature, in its wisdom, has consciously not provided any monetary ceiling under Section 80GGB of the Page | 4 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
Act. In that view of the matter, the AO therefore could not have imported and read into new condition or restriction into Section 80GGB, which has otherwise not been provided in law. My view is also fortified by the fact that, though the Hon'ble Supreme Court in their judgment in the case of ADR Vs UOI (supra) had struck down the Electoral Bond Scheme, 2018 and the amendment in Section 182 of Companies Act, 2013 but there was no direction or adverse observation made in the entire judgment suggesting cancellation of deduction u/s 80GGB or 80GGC of the Act.
"3.3.3 Moreover, it is well settled now that the law to be applied for the purpose of assessment is the law in force as on the first day of the assessment year. An amendment or modification subsequently made but which is not given retrospective effect will not affect the law to be applied and will not be applicable for that year's assessment proceedings. This view is found to be supported by the decision of Hon'ble Madras High Court in the case of CIT Vs ThakurdasChoithram (259 ITR340).
Reliance is placed in the decision of the Hon'ble Supreme Court in the case of Reliance Jute & Industries Ltd. v. CIT (120 ITR 921) wherein it was held as under: -
"6. The assessee claims a vested right under section 24(2)(iii) as it stood before its amendment in 1957, to have the unabsorbed loss of 1950-51 carried forward from year to year until the loss is completely absorbed. The claim is based on a misconception of the fundamental basis underlying every income- tax assessment. It is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication - CIT v. Isthmian Steamship Lines [1951] 20 ITR 572 and Karimtharuvi Tea Estate Ltd. v. State of Kerala [1966] 60 ITR 262. On that principle, it is abundantly clear that when an assessment for the assessment year 1960- 61 is to be made and section 24(2) is invoked, it is section 24(2) as in force in that assessment year which has to be applied. That is the provision as amended by the Finance (No. 2) Act, 1957. There is no question of the assessee possessing any vested right under the law as it stood before the amendment. The assessment for one assessment year cannot, in the absence of a contrary provision, be affected by the law in force in another assessment year. A right claimed by an assessee under the law in force in a particular assessment year is ordinarily available only in relation to a proceeding pertaining to that year. Therefore, inasmuch as the provisions of section 24(2), as amended in 1957, govern the assessment for the assessment year 1960-61, the High Court is right in affirming that the Page | 5 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
unabsorbed loss of Rs. 15,50,189 of the assessment year 1950-51 cannot be carried forward for more than eight years, and consequently cannot be set off against the business income of the assessment year 1960-61."
3.3.4 In view of the above therefore, it is imperative to ascertain the prevailing position of law as it stood on the first day of the assessment year i.e. AY 2022-
23. I find that, earlier Section 182 of the Companies Act, 2013 contained a proviso restricting the quantum of political contributions to the extent of 7.5% of the average net profits of the immediately preceding three financial years. It is seen that this proviso was omitted with effect from 01.04.2017, by virtue of which there was no statutory ceiling on the quantum of political donations that could be made by companies. Accordingly, having regard to the provisions of Section 182 of the Companies Act, 2013, as it stood on 1st April 2022, it is seen that, the appellant was lawfully empowered to contribute any sum to a political party and that there was no monetary ceiling prescribed thereon. I thus find that, the appellant's action of donating sum of Rs.5,50,00,000/- to political party under the Electoral Bond Scheme, 2018 was in accordance with the position of law prevailing as on that date. The appellant thus acquired a vested right under the law in force qua the AY 2022-23 with reference to the law prevailing during that year. The said vested right cannot be taken away or modified by any subsequent enactment or action. On the given facts therefore, I am of the considered view that, the donation of Rs.5,50,00,000/- made by the appellant was not in violation of provisions of Section 182 of the Companies Act, 2013, as it stood then. The AO was therefore unjustified in treating the political donation to have been made unlawfully in excess of stipulated limit, when evidently the stipulated limit had been removed by the Legislature.
3.3.5 I now advert to the decision of the Hon'ble Supreme Court in the case of Association for Democratic Reforms &Anr. v. Union of India & Ors. (supra) which forms the edifice of the impugned disallowance. Having perused the comprehensive judgement of the Hon'ble Supreme Court (supra), it is noticed that, the Hon'ble Apex Court has held the Electoral Bonds Scheme and the corresponding amendments in various Statutes as unconstitutional and violative of the Articles 19 and 14 of the Constitution of India, primarily on account of the 'anonymity' feature being deliberately inducted in the said scheme by way of subject amendments in various statutes, and thereby enabling anonymous political funding in contravention of the fundamental right of the Right to Information of the voters. The Hon'ble Court has not held anything against tax deduction or allowability of political contributions or donations as such. The adverse impact of the 'unconstitutional anonymity' feature of the Electoral Bond Scheme, and the corresponding amendments in various statutes, has been effectively remedied and corrected by the Hon'ble Supreme Court by directing the issuing bank State Bank of India (SBI), to herewith stop the issuance of Electoral Bonds and to submit complete details of Page | 6 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
the purchase of each Electoral Bond, the name of the purchaser of the bond and the denomination of the Electoral Bond purchased. The SBI has also been directed to submit the details of political parties which have received contributions through Electoral Bonds since April 2019 till date to the Election Commission of India (ECI). The SBI has also been directed to disclose details of each Electoral Bond encashed by political parties. The Hon'ble SC has further directed the SBI to submit the above information to the ECI by March 6, 2024. The ECI has been directed to publish the information shared by the SBI on its official website within one week by 13 March 2024. The aforesaid directed compulsory disclosures by 13.3.2024 on the website of the Election Commission of India, will surely remedy the unconstitutional 'anonymity' feature of the subject electoral bond political contributions. The Hon'ble Supreme Court also held the relevant amendments to Section 182 and related provisions unconstitutional, but the remedy granted by the Court did not include a direction to undo or refund donations which had already been validly made and lawfully accepted prior to the judgment. There was no direction issued to refund any excess contributions made beyond the stipulated cap of the erstwhile proviso of Section 182 of Companies Act, 2013 nor was any observation made restricting the allowability of deduction u/s 80GGB of the Act. I am of therefore of the considered view that the AO's interpretation of this judgment and his finding that, the deduction claimed u/s 80GGB in excess of erstwhile stipulated cap in first proviso to Section 182 of Companies Act, 2013, is to be disallowed, does not emanate from the specific directions issued by the Hon'ble Supreme Court, as being claimed by him.
3.3.6 Instead, it is seen that, the Hon'ble Apex Court, in Para, 221(f), has directed that the Electoral Bonds which are within the validity period of fifteen days but that which have not been encashed by the political party yet shall be returned by the political party or the purchaser depending on who is in possession of the bond to the issuing bank. The issuing bank, upon the return of the valid bond, shall refund the amount to the purchaser's account. This implies that the judgement, prima-facie, will not have any adverse impact on the political donations made under the Electoral Bond Scheme 2018 in earlier years and also on the deduction claimed by the Indian companies, and individuals, u/s 80GGB and 80GGC respectively, in the earlier years. The directions of Hon'ble Apex Court are found to be consciously prospective in nature, as because the lawful political donations made by the assessee in earlier years in accordance with the mandate of the Legislature cannot be nullified with retrospective effort. This is because of the well-established legal position that that the Legislature itself has brought the electoral bonds in the category of an eligible contribution to a recognised political party, to be claimed as deduction, under sections 80GGB and 80GGC of the Income Tax Act, in the Finance Act 2017, and which deduction has accordingly been rightfully claimed by the Page | 7 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
respective donors in these assessment years. This principle also emanates from the Doctrine of Supervening Impossibility, which is applicable in Indian Contract Act, 1956 viz., 'law does not compel the impossible'. Hence, in my considered view, the directions issued by Hon'ble Supreme Court striking down the amendment of Finance Act, 2017 removing the prescribed limit of 7.5% of their aggregate net profits, cannot be treated as retrospective in nature so as to treat the contributions to political parties, in excess of the threshold during the relevant AY 2022-23, to be unlawful.
3.3.7 In this regard, I gainfully refer to the decision of the Hon'ble Supreme Court in the case of Behram Khurshed Pesikaka Vs. The State of Bombay [(1955) 1 SCR 613 (SC)]. In this case, a seven-judge constitutional bench of the Hon'ble Apex Court was considering the legal effect of the declaration made in the case of State of Bombay Vs. F.N. Balsara, whereby part of Section 13 clause
(b) of the Bombay Prohibition Act (Act 25 of 1949) was declared unconstitutional. It was held by the majority opinion that declaration of such provision as invalid and unconstitutional will only mean that it is inoperative and ineffective and thus unenforceable, prospectively from the date of verdict and not retrospectively. Similar view was again rendered in the case of M.P.V. Sundararamier and Co. Vs. The State of Andhra Pradesh & Another [1958 SCR 1422]. In this case also, the constitutional bench of the hon'ble Supreme Court has held that "41. Now, in considering the question as to the effect of unconstitutionality of a statute, it is necessary to remember that unconstitutionality might arise either because the law is in respect of a matter not within the competence of the legislature, or because the matter itself being within its competence, its provisions offend some constitutional restrictions. In a Federal Constitution where legislative powers are distributed between different bodies, the competence of the legislature to enact a particular law must depend upon whether the topic of that legislation has been assigned by the Constitution Act to that legislature. Thus, a law of the State on an Entry in List 1, Schedule VII of the Constitution would be wholly incompetent and void. But the law may be on a topic within its competence, as for example, an Entry in List II, but it might infringe restrictions imposed by the Constitution on the character of the law to be passed, as for example, limitations enacted in Part III of the Constitution. Here also, the law to the extent of the repugnancy will be void. Thus, a legislation on a topic not within the competence of the legislature and a legislation within its competence but violative of constitutional limitations have both the same reckoning in a court of law; they are both of them unenforceable. But does it follow from this that both the laws are of the same quality and character, and stand on the same footing for all purposes? This question has been the subject of consideration in Page | 8 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
numerous decisions in the American Courts, and the preponderance of authority is in favour of the view that while a law on a matter not within the competence of the legislature is a nullity, a law on a topic within its competence but repugnant to the constitutional prohibitions is only unenforceable. This distinction has a material bearing on the present discussion. If a law is on a field not within the domain of the legislature, it is absolutely null and void, and a subsequent cession of that field to the legislature will not have the effect of breathing life into what was a still- born piece of legislation and a fresh legislation on the subject would be requisite. But if the law is in respect of a matter assigned to the legislature but its provisions disregard constitutional prohibitions, though the law would be unenforceable by reason of those prohibitions, when once they are removed, the law will become effective without re-enactment."
3.3.8 It is further observed that, the AO's reference to the decision of the Hon'ble Apex Court in the case of ADR vs UOI (supra) in fact supports the appellant's case as at Para 23(I) of the judgment, it has been expressly held that, a statute made by a competent legislature is valid till it is declared unconstitutional and that the doctrine of prospective overruling can be applied to save past transactions. In the present case also, the donations made by the appellant was in accordance with the valid statute as was prevailing then and that the subsequent decision of Hon'ble Supreme Court holding the amendment in Section 182 of Companies Act, 2013 to be unconstitutional cannot be assumed to have retrospective application.
3.3.9 By way of an analogy, I also refer to the decision of the Hon'ble Supreme Court in the case of CIT v. Chotatingrai Tea (258 ITR 529) while dealing with Sec. 35CCA of the Act, had concluded, that a retrospective withdrawal of an approval granted by a prescribed authority would not lead to invalidation of the assessee's claim of deduction. On a similar footing the Hon'ble High Court of Bombay in the case of National Leather Cloth Mfg. Co. v. Indian Council of Agricultural Research (241 ITR 482), while dealing with an issue of denial of deduction under Sec.35(1)(ii) of the Act due to a subsequent withdrawal of approval with retrospective effect, had observed, that such retrospective cancellation of registration will have no effect upon the deduction claimed by the donor, since such donation was given acting upon the registration when it was valid and operative.
3.3.10 In view of the above decisions (supra), it can be safely be concluded that if an assessee acting upon the promise of the Legislature and the mandate laid down in law had donated certain amount for which deduction is claimed, then, such deduction cannot be disallowed if at a later point of time the relevant provision is cancelled with retrospective effect.
Page | 9 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
3.3.11 It is also relevant to keep in mind that, fiscal legislation imposing liability is generally governed by the normal presumption that it is not retrospective and it is a cardinal principle of the tax law that the law to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. Assessment creates a vested right and an assessee cannot be subjected to reassessment unless a provision to that effect inserted by amendment is either is either expressly or by necessary implication retrospective. The appellant has rightly relied upon the decision of the Supreme Court in the case of CIT Vs Vatika Township (P) Ltd (367 ITR 466) wherein the Apex Court dealt in detail with the principle of retrospectivity. The Hon'ble Apex Court held that, any legislation which modifies accrued rights or which imposes new obligations or impose new duties or attach a new disability shall have to be necessarily treated as prospective. The Court further went on to hold that even if in such cases if retrospectivity is attached the provision imposing some burden or liability; then also the presumption to be drawn is that such legislation is prospective. Applying the ratio decidendi of this judgment to the present case, the judgment Hon'ble Supreme Court in the case of ADR vs UOI (supra) striking down the amendment made in Section 182 of Companies Act, 2013 by the Finance Act, 2017 cannot be treated as retrospective as this direction results in a disability and burden on the companies, which had acted in accordance with law which was prevailing at the material time and thus such direction can only be construed prospective in operation.
3.3.12 For the reasons explained above, I therefore of the considered view that the findings given by the AO to deny the deduction u/s 80GGB was devoid of merit and his reliance on the decision of the Hon'ble Supreme Court in the case of ADR vs UOI (supra) was factually misplaced. Accordingly, the impugned disallowance of Rs.5,18,50,157/- is deleted and the AO is directed to allow the deduction u/s 80GGB as claimed by the appellant in the return of income.
Hence, the appeal on this ground is accordingly allowed."
5. The ld. DR appearing for the Revenue vehemently supported the findings of the ld. AO. The ld. DR submitted that, when the Electoral Bond Scheme and the deletion of proviso to Section 182(1) of the Companies Act, 2013 had been declared violative of the constitution and thus struck down, the said judgement would have retrospective operation and therefore, the donation made by way of Electoral Bond to political parties in excess of 7.50% of the Page | 10 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
profits ought to be disallowed. Per contra, the ld. AR appearing for the assessee supported the order of the ld. CIT(A).
6. After hearing the rival contentions and perusing the material on record, the undisputed facts of the case are that, the assessee had donated sum of Rs.5,50,00,000/-to political parties under the Electoral Bond Scheme. The ld. AO has not doubted the genuineness of these donations. Now the issue before us is the quantum which is allowable u/s 80GGB of the Act. The case of the Revenue is that, the deduction allowable u/s 80GGB ought to be restricted to the extent of 7.50% of the average profits of the last three years of the assessee, which works out to Rs.31,49,843/- and the remaining sum ought to be disallowed. In out opinion the ld. CIT(A) has rightly observed that, there is no stipulation laid down in Section 80GGB that the political donations has to be within the limits stipulated in Section 182 of the Companies Act, 2013. Thus we are in complete agreement with the above findings of the Ld. CIT(A) in para 3.3 to 3.3.2 as extracted above.
7. The Revenue has further contended that the decision rendered by the Hon'ble Supreme Court in the case of ADR (supra) declaring the Electoral Bond Scheme to be unconstitutional is required to be retrospectively applied and therefore the electoral bonds subscribed in excess of 7.50% of the profits cannot be allowed as deduction to the assessee. We find Page | 11 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
that the ld. CIT(A) has comprehensively analysed the decision rendered by the Hon'ble Supreme Court in the case of ADR (supra) in light of the scheme of section 80GGB of the Act and thereafter, rightly concluded that the directions issued by the Hon'ble Supreme Court striking down the amendment made in Companies Act, 2017 cannot be treated to have retrospective operation. We thus concur with the findings of the ld. CIT(A) in para 3.3.3. to 3.3.12 of the appellate order.
8. We thus are not inclined to interfere with the order of the ld. CIT(A) on this issue and consequently , dismiss the ground nos. 1 to 3 of the Revenue's appeal.
9. The issue raised in Ground No. 4 relates to the estimated disallowance of miscellaneous expenses of Rs.1,32,130/-. The facts in brief are that, the ld. AO had called for the details of the miscellaneous expenses of Rs.6,60,648/- debited in the P&L A/c and the assessee had furnished the break-up of the same. The ld. AO was of the view that the miscellaneous expenses were not fully supported by positive evidences and thus, found it fair and reasonable to disallow 20% of the expenses, viz. Rs.1,32,130/-. In the appellate proceedings, the ld. CIT(A) reduced the estimated disallowance from 20% to 10%.
10. After hearing both the parties and having regard to the nature of business of the assessee, turnover volume, etc. we are of the view that the ld. CIT(A) had acted fairly in restricting the Page | 12 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
disallowance to the extent of 10% of the miscellaneous expenses and we see no reason to interfere with the same. This ground no. 4 is accordingly dismissed.
11. The issue raised in Ground No. 5 relates to the ld. CIT(A)'s action of deleting the disallowance of fines of Rs. 7,76,680/-paid by the assessee to the stock exchanges. The ld. AO was of the view that the fines and penalties paid to the stock exchanges was penal in nature and therefore, not allowable in terms of Explanation 1 to Section 37(1) of the Act.
12. In appeal, the ld. CIT(A) observed that, on similar facts, various coordinate benches of the Tribunal had deleted similar disallowance of fines and penalties paid to the stock exchanges and thus deleted the disallowance made by the ld. AO by observing and holding as under:
"5.2 Upon going through the submissions of the appellant, it is noticed from the details that the fines to the extent of Rs.2,76,667/- has been paid to Bombay Stock Exchange & National Stock Exchange for delay in payment of the dues and for various other obligations arising out of carrying on business activities. It is observed that the Hon'ble ITAT, Kolkata in the case of ITO vs. GDB Share & Stock Broking Services Ltd (3 SOT 569) has held that fines and penalties paid to stock exchanges cannot be said to be for infringement of law. Similar view has been taken by Hon'ble Bombay High Court in the case of The Stock and Bond Trading Company (ITA No. 4117 of 2010) and by Hon'ble ITAT Mumbai in the case of Goldcrest Capital Markets Ltd. (2 ITR(Trib) 355). Respectfully following ratio laid down by judicial authorities, including jurisdictional bench of Hon'ble tribunal, the disallowance to the extent of Rs.2,76,667/- is found to be unsustainable.
5.2.1 In so far as penalty of Rs.5,00,011/- paid to SEBI is concerned, it is noted that the said fine was paid as a matter of regulatory settlement without admission to any guilt and for smooth conduct of business activities. I find that Page | 13 ITA No(s). 3289/KOL/2025 Assessment Year(s)2022-23 Abhinandan Stock Broking Private Limited.
the Hon'ble ITAT, Mumbai in several of their decisions rendered in the matters of Goldman Sachs (India) Securities (P.) Ltd. vs. ACIT [2025] 175 taxmann.com 803, DCIT vs Anil Dhirajlal Ambani [2018] 93 taxmann.com 492 & ITO v. Reliance Shares & Stock Brokers (P.) Ltd. [2014] 51 taxmann.com 215; has that the penalty paid to the SEBI, without accepting the allegation but to avoid future litigations is an allied cost and allowable expenditure. Following these decisions (supra), the fine of Rs.5,00,011/- paid to SEBI is also deleted.
....
5.2.3 Overall therefore, the disallowance out of fines & penalties to the extent of Rs.7,76,678/- is deleted and balance amount of Rs.6,354/- is confirmed.
Hence, the appeal on this ground is partly allowed."
13. The ld. DR appearing for the Revenue was unable to controvert the above findings of the ld. CIT(A) or furnish any contrary judgement on this issue. We thus find that the ld. CIT(A) had passed a well-reasoned order deleting the impugned disallowance and thus confirm the same. This ground no. 5 is accordingly dismissed.
14. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open Court on 15thApril, 2026.
Sd/- Sd/-
[Pradip Kumar Choubey] [Rajesh Kumar]
Judicial Member Accountant Member
Dated: 15.04.2026
Page | 14
ITA No(s). 3289/KOL/2025
Assessment Year(s)2022-23
Abhinandan Stock Broking Private Limited.
Copy of the order forwarded to:
1. DCIT, CC-2(1), Kolkata.
2. Abhinandan Stock Broking Private Limited, 95 Sarat Bose Road, 3rdFloor, City PointSarat Bose Road, Kolkata, West Bengal, 700029.
3. CIT(A)-26, Kolkata.
4. CIT-
5. CIT(DR), Kolkata Benches, Kolkata.
6. Guard File.
//True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata