Court dismisses appeal on Section 14A disallowance and TDS deduction, citing lack of substantial questions.

The Court dismissed the appeal as no substantial question requiring consideration was found to exist in either of the issues raised by the Revenue. The disallowance under Section 14A was rejected as the assessee did not earn any exempt income during the relevant year, and previous decisions supported this position. Regarding the alleged failure to deduct TDS on listing and custodian fee, the Court held that TDS was not required as the payments did not fall under the definition of "technical services" under Section 194J, citing relevant precedent.

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Issues:
1. Disallowance under Section 14A of the Income Tax Act, 1961
2. Alleged failure to deduct TDS on listing and custodian fee

Analysis:

Issue 1: Disallowance under Section 14A
The first issue raised by the Revenue concerns the disallowance under Section 14A of the Income Tax Act. It was acknowledged that the assessee did not earn any exempt income during the relevant year. Citing precedents such as Commissioner of Income Tax-IV v. Holcim India Private Limited and Cheminvest Limited v. Commissioner of Income Tax-VI, the Court concluded that as the issue was covered by previous decisions against the Revenue, no substantial question of law arose. The decision in Principal Commissioner of Income Tax-6, New Delhi v. Mcdonald’s India Private Limited further supported this position.

Issue 2: Alleged failure to deduct TDS on listing and custodian fee
The second issue in the case revolved around the alleged failure of the assessee to deduct TDS on the listing and custodian fee paid to various entities. The Assessing Officer disallowed the expenditure under Section 40(a)(ia) for not deducting TDS under Section 194J of the Act. However, the Court referred to the decision of the Supreme Court in Commissioner of Income Tax v. Kotak Securities Limited, where it was established that Section 194J applies to specialized, exclusive, and individual services, not common general facilities. Consequently, the Court held that TDS was not required to be deducted on the membership fee for listing and custodian fee paid to stock exchanges, as these did not fall under the definition of "technical services" under Section 194J.

In light of the above analysis, the Court dismissed the appeal, as no substantial question requiring consideration was found to exist in either of the issues raised by the Revenue.

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