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TMI Blog2017 (12) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, had therein concluded that ‘transaction charges’ being in the nature of charges paid by a stock broker for facilities provided by the Stock exchange, thus, the same cannot be characterised as ‘fees for technical services’ Thus, we are of the considered view that now when the ‘transaction charges’ paid by the assessee to the Stock exchange cannot be held as ‘fees for technical services’, therefore, no disallowance of the aforesaid amount would be called for in the hands of the assessee under Sec. 40(a)(ia). No disallowance under Sec. 40(a)(ia) of the ‘transaction charges’ was called for in the hands of the assessee.- Decided in favour of assessee. - I.T.A. No. 142/Mum/2016 - - - Dated:- 25-10-2017 - SHRI B.R. BASKARAN, AM AND SH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of 194J of the act. 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 2. Briefly stated, the facts of the case are that the assessee company which is engaged in the business of Share Broking as a member of Bombay Stock Exchange and National Stock Exchange had filed its return of income for A.Y. 2007-08 on 15.11.2007, declaring total income of ₹ 80,70,021. The case of the assessee was taken up for scrutiny assessment under Sec. 143(2). The A.O being of the view that the assessee had failed to deduct tax at source on transaction charges of ₹ 36,52,820/-, therein disallowed the same under Sec. 40(a)(ia), and after deliberating on certain other issues assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Tribunal while disposing of the assesses own appeal for A.Y. 2009-10, marked as ITA No. 7158/Mum/2012, dated. 22.04.2015, had deleted the addition/disallowance of Transaction charges made under Sec. 40(a)(ia) for non-deduction of tax at source, by observing as under: We have heard both the parties and the contentions have carefully been considered. Keeping in view the sequence of dates which have been reproduced above, we are of the opinion that according to the facts of the case, the relevant portion of the decision of the Hon ble Bombay High Court in the case of CIT vs. Kotak Securities Ltd. (supra) which is reproduced in the order would be applicable and disallowance deserves to be deleted. Similarly, disallowance also deser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to have deducted tax at source under Sec. 194J of the Act, but however, since both the Revenue and the assessee were under the bona fide belief for nearly a decade that tax was not deductible at source on payment of transaction charges, therefore, no fault could be found with the assessee in not deducting the tax at source in the assessment year in question, viz. A.Y. 2005- 06, and consequently the disallowance made by the AO under s. 40(a)(ia) in respect of the transaction charges could not be sustained. It was submitted by the ld. D.R that the observations of the Hon ble High Court while exonerating the assessee on the ground of bonafide belief from the aforesaid default, were only in context of A.Y. 2005-06, and thus the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentatives for both the parties, perused the orders of the lower authorities and the material available on record. We are of the considered view that after the judgment of the Hon ble Supreme Court in the case of CIT Vs. Kotak Securities Limited. (2016) 383 ITR 0001 (SC) , the issue as to whether transaction charges fall within the sweep of fees for technical services , or not, had been settled once and for all and is no more found to be res integra. We find that the Hon ble Apex Court deliberating at length on the issue under consideration, had therein concluded that transaction charges being in the nature of charges paid by a stock broker for facilities provided by the Stock exchange, thus, the same cannot be characterised as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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