2010 (2) TMI 1115

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....f transaction done on behalf of its clients in the Bombay Stock Exchange. The AO disallowed u/s 40(a)(ib) of the Act, the amount paid by the assessee on account of Securities Transaction Tax. A disallowance was also made u/s 14A. On appeal, the first appellate authority granted part relief. The assessee has come up on further appeal on following ground :  " On the facts and in the circumstances of the case and in law, the Hon'ble Commissioner of Income-tax (Appeals)-IV, Mumbai erred in confirming the action of the Assessing Officer 4(1)(1), Mumbai in adding Rs. 6,19,566 paid towards Securities Transaction Tax on behalf of clients. The appellant prays that the addition made by the A.O. and confirmed by the CIT(A) may please be delete....

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....ated by applying the average rate of income-tax on such income. [(3) No deduction under this section shall be allowed in, or after, the assessment year beginning on the 1st day of April, 2009.] Explanation.-For the purposes of this section, the expressions, "taxable securities transaction" and "securities transaction tax" shall have the same meanings respectively assigned to them under Chapter VII of the Finance (No. 2) Act, 2004.] " 5. Under the Finance (No.2) Act, 2004 in Chapter VII under the head Securities Transaction Tax, clause 100 reads as follows : "100. Collection and recovery of securities transaction tax.- (1) Every recognised stock exchange shall collect the securities transaction tax from every person, being a purchas....