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TMI Blog2018 (5) TMI 2161X X X X Extracts X X X X X X X X Extracts X X X X ..... issues in its grounds of appeal which are dealt with as under :- 3. The assessee has disputed the disallowance made by the Assessing Officer amounting to Rs. 22,421/- on account of penalty levied by the National Stock Exchange/NSDL for committing irregularities in conduct of business having regard to Rules, Bye-laws and Regulations of Exchange. We find that the issue is no longer res integra. The Hon'ble Bombay High Court in the case of CIT vs. The Stock and Bond Trading Company in Income Tax Appeal No. 4117 of 2010, judgement dated 14.10.2011, has held that payments made by the assessee to the Stock Exchanges for violation of their regulations are not akin to an offence which is prohibited by law, as contemplated in Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/-. As pointed out on behalf of the assessee at the time of hearing before us, the aforesaid loss has been incurred by the assessee in open contracts of futures and options segment. It is a case of the assessee that the loss in the open contracts has been booked as per accounting standard prescribed by ICAI and the accounting policy has been followed consistently. We find ourselves in agreement with the plea on behalf of the assessee that Mark to Market Loss on futures and options contract is not a notional loss and the loss has crystallised at the end of the year notwithstanding the continuance of the contract. We also note the plea of the assessee that it has made entries following accounting standard AS-11 of ICAI. The Hon'ble Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee that the assessee has deducted TDS on such payments of NSDL & Stock Exchanges albeit wrongly under section 194C considering that the payments are in the nature of contractual payment. The revenue, on the other hand, contends that these payments of Rs. 11,52,592/- & Rs. 1,00,000/- are in the nature of fee for technical services and, therefore, TDS ought to have been deducted at a higher rate as per section 194J of the Act. 8.2 Similarly, another payment of Rs. 2,00,000/- has been paid by the assessee to the Stock Exchange towards VSAT charges. That the assessee has deducted TDS at a lower rate by applying section 194C of the Act. 8.3 Therefore, while making all these payments towards various expenses, the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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