Income Tax Appellate Tribunal - Mumbai
National Stock Exchange Of India Ltd, ... vs Dcit, Cir-7(1)(1), Mumbai on 15 May, 2023
IN THE INCOME TAX APPELLATE TRIBUNAL, 'B' BENCH MUMBAI BEFORE: SHRI B.R. BASKARAN, JUDICIAL MEMBER & SHRI, AMIT SHUKLA, JUDICIAL MEMBER SA No.38 & 39/Mum/2023 (Arising out of ITA No.730/Mum/2023 & 731/Mum/2023) (Assessment Year :2016-17 & 2017-18) M/s. National Stock Vs. Dy. Commissioner of Exchange of India Income Tax, Circle Limited 7(1)(1), Mumbai Exchange Plaza Bandra Kurla Complex Bandra (E) Mumbai - 400 051 PAN/GIR No.AAACN1797L (Appellant) .. (Respondent) CORRIGENDUM The assessee had filed a letter requesting for corrigendum in respect of combined stay order dated 31/03/2023, wherein the Tribunal has granted stay of demand in the terms stated therein. It has been pointed out that the Tribunal while granting stay had observed that on one of the main issues, i.e., addition on account of provision to core settlement guarantee fund is covered by the decision of the Tribunal in assessee's own case for A.Y.2007-08 and 2009-10 vide order dated 16/10/2019. However, it has been pointed out that during the course of hearing it was stated that this issue is covered by the decision of the Mumbai Tribunal in the case of another assessee, i.e. BSE Ltd which is exactly on similar issue and not in the case of NSE.
2SA Nos.38 & 39/Mum/2023 M/s. National Stock Exchange of India
2. The relevant information in the said application which is appearing at page No.10 of Annexure A titled as "reasons for seeking stay" reads as under:-
"Thus, it is submitted that the said statutory contribution is permissible deduction being statutory contribution as per SEBI direction and not in the nature of contingent liability in light of the decision of Hon'ble Mumbai ITAT in the case of BSE Ltd vs. Pr. CIT (ITA 1790/M/2019). In the said decision similar issue has been dealt by Hon'ble Mumbai ITAT. The Hon'ble Bench observed that contribution made to Core SGF is not in the nature of contingent liability and is permissible as deduction being statutory contribution as per SEBI direction. Para 12 of the aforesaid ITAT order is reproduce below for your ready reference:
"12 We are of the view that contingency means a future event or circumstances which is possible but cannot be predicted with certainty. In the present case the liability to pay/ contribute is certain and accrued as per the Circular of SEBI The said amount is transferred to CSGF and has not remained with BSE, therefore, it cannot be said to be in a nature of contingency reserve. Secondly, the contribution cannot also be termed as deposit. Oxford dictionary defines deposit as "place (something) somewhere for safekeeping". In the present case the amount is transferred to CSGF of Indian Clearing Corporation Limited (ICCL) and has not been kept for safekeeping. The amount transferred will be utilized by ICCL as per the guidelines provided by SEBI from time to time. Therefore, the contribution is revenue in nature and not an asset or deposit. ICCL has also confirmed vide letter dated 7.12.2017 (refer Annexure 3) that BSE has contributed a sum of Rs. 25,78,84,501/- to CSGF and no amount has been shared with BSE as on 31.03.2015. BSE has no right over the amount already contributed to CSGF We are of the view that the assessee is able to prove beyond doubt that the contribution to CSGF is not in the nature of any deposit/ 3 SA Nos.38 & 39/Mum/2023 M/s. National Stock Exchange of India contingency reserve. Thirdly, on the contribution the circular itself says that it is "transfer of profit". We noted and are of the view that SEBI has prescribed the methodology to arrive at a figure of contribution to CSGF and therefore it's not an appropriation of profit as alleged. This fact was already explained before the AO and has also been considered in the assessment order"
Thus, the issue is covered in the favour of the assessee by the order of Hon'ble ITAT in the case of BSE Ltd. "
Further reference is also made to Para 11.1 (i) of Annexure A
- "Reasons for seeking stay" reproduced below:
(11.1)
(i) Allowability of deduction of contribution made to core SGF have been decided in favour of applicant by the Hon'ble Mumbai ITAT in case of BSE Ltd vs. Pr. CIT (ITA 1790/M/2019) wherein the Hon'ble tribunal has considered the allowability of contribution made to Core SGF as deduction being statutory contribution which has crystallized as per SEBI Circular and norms."
3. In view of the aforesaid fact, we agree with the applicant that there is a mistake in stating that this issue is covered in assessee's own case rather this case is covered by the decision of the Tribunal on exactly similar facts and on similar ground in the case of Bombay Stock Exchange (supra). Accordingly, we hold that the words in 8th line of para 1 instead of "is covered by the decision of the Tribunal in assessee's own case for A.Y.2007-08 and A. Y. 2009-10 vide order dated 16/10/2019" will read as "is covered in the case of BSE Ltd. for AY 2015-16 bearing ITA No. 1790/Mum/2019 dated 04.10.2019"
4SA Nos.38 & 39/Mum/2023 M/s. National Stock Exchange of India
4. Similarly, words in 4th & 5th line of para 3 instead of "assessee's own case", will be modified with the words "the case of BSE Ltd. for AY 2015-16 bearing ITA No. 1790/Mum/2019 dated 04.10.2019".
5. Accordingly, stay order dated 31/03/2023 is accordingly, modified.
Sd/- Sd/-
(B.R. BASKARAN) (AMIT SHUKLA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai; Dated 15/05/2023
KARUNA, sr.ps
Copy of the Order forwarded to :
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
//True Copy//
BY ORDER,
(Asstt. Registrar)
ITAT, Mumbai