2017 (12) TMI 420

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....IT(A) by raising before us the following grounds of appeal.:- "1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in allowing the appeal of the assessee relying on the decision of the ITAT in the assesses case for A.Y. 2009-10 in spite of the fact that the decision of Tribunal for A.Y. 2009-10 is itself contradictory in view of the decision of Hon'ble Jurisdictional High Court in the case of Kotak Securities Ltd. Where non deduction of TDS on payment of transaction charges has been held as bonafide for A.Y. 2005-06 only. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in allowing the appeal of the assessee on the issue of non-deduction of TDS on the transaction charges whi....

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....Bom) decided the issue in the favour of the revenue. The assessee filed a 'Miscellaneous application' before the Tribunal, marked as M.A No. 167/Mum/2012 on the ground that as it was under a bonafide belief as regards its statutory obligation of deducting tax at source on the transaction charges, therefore, the aforesaid disallowance of Rs. 36,52,820/- in all fairness may be deleted. The Tribunal, viz. ITAT 'C' bench, vide its order dated. 12.10.2012 allowed the miscellaneous application and in the backdrop of the aforesaid contention of the assessee, therein restored the matter to the file of the A.O. However, the A.O in the course of the set aside proceedings rejected the claim of the assessee for allowing of the aforesaid amount of Rs. 3....

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....a) in the hands of the assessee during the year under consideration. 3. The revenue being aggrieved with the order of the CIT(A) vacating the disallowance/addition of Rs. 36,52,820/- made by the A.O under Sec. 40(a)(ia), had carried the matter in appeal before us. The ld. Department Representative (for short 'D.R') at the very outset submitted that the CIT(A) while disposing of the present appeal of the assessee had gravely erred in following the order of the Tribunal in the case of the assessee for A.Y. 2009-10. The ld. D.R in order to drive home her aforesaid contention therein averred that the Hon'ble High Court while disposing of the appeal in the case of CIT Vs. Kotak Securities Limited (2012) 340 ITR 333 (Bom), which pertained to A....

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....t tax at source in terms of Sec. 194J, had been reversed by the Hon'ble Supreme Court in the case of CIT Vs. Kotak Securities Limited. (2016) 383 ITR 0001 (SC). It was submitted by the ld. A.R that the Hon'ble Apex Court had held that as 'transaction charges' paid to Stock Exchange by its members were not for 'technical services', but for the facilities provided by Stock Exchange, therefore, no tax on such payments was required to be deducted at source under Sec. 194J. The ld. A.R in the backdrop of his aforesaid contention submitted that now when the 'transaction charges' are not to be held as 'fees for technical services', therefore, no disallowance under Sec. 40(a)(ia) for failure to deduct tax at source under Sec. 194J could hav....