TaxTMI 
TaxTMI 
2015 (10) TMI 811
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....d order the CIT(A) deleted the addition with respect to VSAT charges, part of addition made u/s.14A, penalty paid to SEBI. However, the CIT(A) confirmed the addition on account of mark to market loss and part of the addition made u/s.14A. Against this order of CIT(A) both the assessee and revenue are in appeals before us. 4. At the outset ld. AR contended that the issue with regard to disallowance of VSAT charges for non-deduction of tax has been consistently decided by various benches of the Tribunal including assessee's own case for the A.Y.2006-07 & 2008-09, as well as the Hon'ble Bombay High Court in Angel Capital & Debt market Ltd., in assessee's favour. 5. We have considered rival contentions and found that the issue with regard to payment of VSAT/lease line charges to the stock exchange without deduction of tax at source is covered in favour of assessee by the decision of Hon'ble Bombay High Court in the case of Angel Capital & Debit Market Ltd., I.T Appeal(L) No.475 of 2011, dated 28-7-2011. Similar issue has been considered by various benches of the Tribunal as well as assessee's own case for the assessment year 2005-06 and 2006-07 vide order date....
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....rough the facts of the case as observed by the AO in the assessment order and also recorded by the CIT(A) in his order and the references made by the AR to the various aspects of the case from the paper book. According to the AR, case of the assessee on the issue of provision for loss on mark to market, is covered by the decision arrived at by the coordinate Bench of I.T.A.T., Mumbai in the assessee's sister concern, i.e. Edelweiss Capital Ltd. Mumbai in ITA No. 5324/M/2007 dated 10.10.2010, wherein the Hon'ble coordinate Bench held as under:- "The aforesaid Note gives a fair picture of the nature of provision. The provision in substance has been made to cover the anticipated loss in the derivatives trading. There is no dispute that the assessee holds derivatives as its stock-in-trade and there is also no dispute that it follows the principle "cost or market price, whichever is lower" in valuing the derivatives. When the derivatives are held as stock-in-trade then whatever rules apply to the valuation of stock- in-trade will have to be necessarily apply to their valuation also. It is a well settled position in law that "while anticipated loss is taken into account ....
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...." 13. Besides the case of the assessee's sister concern, the AR also cited the cases of Bank of Bahrain & Kuwait, reported in 41 SOT 290 (Mum-SB) and the case of Hon'ble Supreme Court in Woodword Governor India Pvt. Ltd., reported in 312 ITR 254. It was pointed out by the AR that the case so heavily relied upon by the AO and the CIT(A), i.e. the case of CIT Vs. Kamani Metal and Alloys Ltd. 208 ITR 1017 (Bombay) had been distinguished on facts. The DR, after the Bench, submitted on untitled extract wherein it mentioned that where such money is stock in trade, the loss had to be accounted for as per according standards. 14. We find that the case so heavily relied upon by the Revenue authorities have facts which are no different footings. In that case, where the contract was between the assessee and MMTC, no raw material was purchased during the relevant accounting year. The raw material was received in the next accounting year. The Hon'ble High Court, on these facts held that since there was no material except the paper contract, the material so contracted could not be regarded as assessee's stock in trade. 15. In the case at hand, the asses....
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.... Tribunal in case of Mehta Vakil and Co. Ltd.. The precise observation of the Tribunal with regard to the disallowance made for transaction charges paid without deduction of tax at source was as under:- "3. We notice that the Hon'ble jurisdictional Bombay High Court has held in the case of CIT Vs. Kotak Securities Ltd (2012)(340 ITR 333) that the transaction charges paid by the assessee to the stock exchanges constitute .fee for technical services. and the same is liable for tax deduction at sources u/s 194J of the Act. However, before the Hon'ble High Court, the assessee therein pleaded that it was under bonafide belief that no tax was deductible at source. The Hon'ble High Court also noticed that the assessee has been paying the transaction charges for the past several years without subjecting the same to tax deduction at source and the department has also allowed the claim. Hence the Hon'ble High Court, under these peculiar facts, held as under:- "However, since both the revenue and assessee were under the bona fide belief for nearly a decade that tax was not deductible at source on payment of transaction charges, no fault can be found with the assessee in not ....