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TMI Blog2012 (11) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... ill carry out necessary verification and quantify the interest. Thus, ground of appeal raised by the department stands allowed, subject to quantification of interest - In the result, appeal for assessment years 2005-06, 2006-07, 2007-08 & 2008-09 stands allowed subject to verification and quantification of interest by the Assessing Officer. - ITA Nos : 6335 to 6338/Mum/2010 - - - Dated:- 8-6-2012 - SHRI G.E. VEERABHADRAPPA, AND SHRI AMIT SHUKLA, JJ. Appellant-Department by: Mr. B. Jaya Kumar Respondent-assessee by: Mr. Ranjan R. Vora O R D E R PER AMIT SHUKLA (J.M.) : These are the bunch of appeals filed by the department for the assessment years 2005-2006, 2006-2007, 2007-2008 2008-2009 against the order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ket and therefore, transaction charges are charges for technical services within the meaning of section 194J of the IT Act, 1961. 3. The relevant facts as are culled out from the order of CIT(A) are that the assessee is a public limited company and is engaged in the business of share broker and investor/dealer in securities, stocks, shares, derivatives and other permissible marketable instruments. A survey under Section 133A was conducted on 27-2-2008 in respect of matter relating to tax deduction at source for the assessment year 2008-2009. During the course of the survey operation, it was noticed that the assessee has not deducted TDS on the payment on transaction purpose, to BSE, NSE and IL FS at Rs. .13,32,13,255/-. The assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra), passed in ITA No.1953/M/2008 and held that no TDS was liable to be deducted by the assessee. The relevant finding of the CIT (A) is reproduced herein below :- 7. I have considered the above submission very carefully and have perused the order of the assessing officer. I find that the issue involved under this ground of appeal is decided by the Hon ble ITAT, Mumbai in ITA No. 1955/Mum/08 for A.Y. 2005-06 in the case of Kotak Securities vs. Addl. CIT-4(3) vide order dated 26-08-2008 in favour of the appellant. The Hon ble Tribunal held that the Stock Exchange does not provide managerial services and the fees paid by the member to the Stock Exchange is not for any technical services rendered, so TDS is not deductible on he same. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction charges levied by the stock exchange. The BOLT system provided by the Bombay Stock Exchange is a complete platform containing the entire spectrum of trading in securities. The BOLT system not merely provides the live connection between prospective purchasers and prospective sellers of the respective securities/ derivatives together with the rates at which they are willing to buy or sell the securities, but also provides a mechanism for concluding the transaction between the two parties. The BOLT system withholds the identity of the two contracting parties, namely, the buyer and the seller of the respective securities/derivatives. Under the screen-based BOLT system, the entire trading system is managed and monitored right from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e opposite party would be in consonance with the norm laid down by the stock exchange and that the transaction would be settled efficiently and expeditiously. The fact that the stock exchange levies or collects lesser transaction charges where the value of the transaction is higher, cannot be a ground to hold that no managerial services are rendered by the stock exchange, because, what should be the criteria for levying the transaction charges is left to the discretion of the stock exchange. The fact that the transaction charge is based on the value of the transaction and not the volume of transaction is not determinative of the fact as to whether managerial services are rendered or not. In other words, whatever be the measure for levying t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not mean that the managerial services are not rendered, because, firstly, the in-built mechanism in the BOLT system itself is a part of the managerial service rendered by the stock exchange and, secondly, even the in-built mechanism provided in the system is varied or altered by the stock exchange depending upon the circumstances encountered during the course of rendering managerial services. 28.The argument that the BOLT system is like a ATM system provided by the banks is also without any merit, because through the ATM system, no trading activity is carried on, whereas, through the BOLT system trading activity is carried on which is monitored/regulated/managed by the stock exchange. Therefore, in our opinion, the Tribunal was in erro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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