2014 (5) TMI 814

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....- in respect of VSAT charges and Rs. 6,82,057/- on account of transaction charges made u/s 40(a)(ia) paid to Stock Exchange, without appreciating the acts that these were composite charges for professional and technical services rendered by the stock exchange to its members and the assessee has failed to deduct TDS thereon. ii. On the facts and in the circumstances of the case and in law, Ld CIT (A) erred in ignoring the fact that these services are essential in nature as they can only be availed by members of Stock Exchange. iii. On the fact and in the circumstances of the case and in law, the Ld CIT (A) erred in ignoring the facts that use of technology and algorithmic based programs have converted an erstwhile physical market into a di....

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....8223;s own case was received. Further, referring to the issues raised in the grounds raised by the Revenue, Ld Counsel mentioned that ground no.2 relating to the disallowance u/s 14A read with Rule-8D was wrongly raised by the Revenue when the CIT (A) dismissed the relevant ground of the assessee. In this regard, Ld Counsel brought our attention to the para 2.3.6 of the impugned order and read out the same which is as under: "2.3.6. Therefore, the disallowance u/s 14A is confirmed at Rs. 2,64,521/- as against the disallowance of Rs. 2,64,521/- made by the AO. This ground of appeal is therefore, dismissed." 4. Reading the above, Ld Counsel mentioned that the CIT (A) has factually confirmed the addition made by the AO and therefore, logical....

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....ourt of Bombay in the case of CIT vs. Angel Capital & Debit Market Ltd vide Income Tax Appeal (L) No.475 of 2011 dated 28th July, 2011. Para 2 of the said judgment of the High Court (supra) is relevant here and the same reads as under: "2. As regards first two questions are concerned, the findings of fact recorded by the ITAT is that VSAT and lease Line Charges paid by the assessee to Stock Exchange were merely reimbursement of the charges paid / payable by the Stock Exchange to the Department of Telecommunication. Since, the VSAT and Lease Line Charges paid by the assessee do not have any element of income, deducting tax while making such payment do not arise. Hence, question Nos. (A) and (B) cannot be entertained." 8. Similarly, regardi....

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....leted. However, this defence is not available in the assessment year 2008-09 because by that time, the Revenue has already invoked the provisions of section 40(a)(ia) and this fact was known to the assessee. Therefore, in our opinion, in view of para 31 of the decision of the hon'ble Bombay High Court in the case of Kotak Securities Ltd. [2012] 340 ITR 333 (Bom), the provisions of section 40(a)(ia) are not applicable for the assessment year 2007-08 whereas the same are applicable in the assessment year 2008-09. - CIT v. Kotak Securities Ltd. vide ITA No. 3111/M/2009 [2012] 340 ITR 333 (Bom), relied." Thus, granted relief to the on account of „Transaction Charges‟ too relying on the decision in the case of DICGC (supra) and a....