2013 (5) TMI 947 - AT - Income Tax

Summary

Issues involved: Challenge to the correctness of the order of the Ld. CIT(A)-9, Mumbai regarding the deletion of disallowance made u/s. 40A(ia) in respect of charges paid to Stock Exchange for assessment year 2007-08.

Summary:
- The Revenue challenged the deletion of disallowance of Rs. 54,12,157/- made u/s. 40A(ia) in respect of charges paid to Stock Exchange.
- The Assessing Officer disallowed the amount on the grounds of non-deduction of tax at source as charges were considered fees for technical services.
- The Ld. CIT(A) allowed the appeal in favor of the assessee based on precedent.
- The issue of deductibility of transaction charges was discussed, with reference to decisions of the Jurisdictional High Court and the Supreme Court.
- The AO was directed to allow expenditure on VSAT and Leaseline charges but to disallow transaction charges pending the outcome of the Special Leave petition filed by the assessee.
- The Revenue's appeal was partly allowed based on the above considerations.

This judgment clarifies the treatment of various charges paid to the Stock Exchange, distinguishing between VSAT, Leaseline, and transaction charges. It emphasizes the importance of tax deduction at source and refers to relevant legal precedents to determine the deductibility of such charges. The decision highlights the significance of following jurisdictional High Court rulings and awaiting the outcome of pending legal matters before disallowing certain expenses.