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TMI Blog2010 (9) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction charges of ₹ 10,25,597/- made under section 40(a)(ia). The Assessing Officer was of the view that the aforesaid expenses were incurred as fees for technical services and therefore the assessee ought to have deducted the tax in accordance with section 194J of the Act read with Explanation 2 to clause (vii) of sub-section (1) of section 9. The CIT(A) held, following the order of the Mumbai Bench of the Tribunal in ITA No.1955/Mum/2008 (Assessment Year: 2005-06) dated 26.08.2008, that the stock exchange does not provide any managerial or technical services to the assessee and therefore the charges paid by the assessee are not tax deductible under section 194J. He accordingly directed the Assessing Officer to allow the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relatable to the securities transaction tax paid transactions after reducing the expenditure and thus the profits must be derived from the transaction on which securities transaction tax is paid. From the perusal of the F O ledger maintained by the assessee, he noticed that the assessee had declared F O profit of ₹ 3,54,55,681/- inclusive of securities transaction tax. This amount included ₹ 37,74,593/- on account of notional gains arising from F O open positions. According to the Assessing Officer this profit is the result of market valuation on account of F O open positions which were not squared off and therefore carried forward. According to him, the profit arising on account of open F O positions was not liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no reason not to allow rebate u/s.88E. The rebate in respect to security transaction tax is allowable if the total income includes income chargeable under the head profits and gains of business or profession arising from taxable security transactions. In the present case, the profit and gains of business or profession of the appellant includes F/O profit on open position, therefore, the Security Transaction Tax paid on such F/O transactions do qualify for rebate u/s.88E. The Assessing Officer is therefore directed to allow rebate with respect to F/O profit on open position included in the total income of the appellant. 5. The revenue is in appeal to reiterate the view taken by the Assessing Officer, whereas the learned counsel f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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