MANALI TRADING & HOLDING P.LTD,MUMBAI vs. ITO (TDS) WD 2(3), MUMBAI

PDF · subscribers
ITA 3939/MUM/2015Status: DisposedITAT Mumbai16 February 2018AY 2010-113 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that transaction charges paid to stock exchanges are not fees for technical services and therefore, no tax is deductible at source under Section 194J.

What were the facts?

The assessee paid transaction charges to stock exchanges. The revenue authorities held that these charges were fees for technical services and tax was deductible at source under Section 194J.

What were the issues?

Whether transaction charges paid to stock exchanges constitute 'fee for technical services' requiring TDS under Section 194J of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 194J

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI

Before: SHRI G.S.PANNU & SHRI RAVISH SOOD

For Appellant: Shri Dyaneshwar
For Respondent: Shri T.A.Khan
Hearing: 23/11/2017

ORDER PER G.S.PANNU,A.M:

The captioned appeals filed by the assessee pertaining to assessment years 2010-11 and 2011-12 are directed against separate orders passed by CIT(A)-14, Mumbai dated 18/08/2014, which in turn arise out of an orders passed by the Assessing Officer under section 201(1)/201(1A) of the Income Tax Act, 1961 (in short ‘the Act’) dated 09/03/2012.

2.

In both the captioned appeals a common issue arises, which relates to tax deductible at source on transaction charges paid to the stock exchange. In assessment year 2010-11 assessee paid transaction charges to BSE of Rs.20,577/- and Rs.9,54,604/- to NSE and in assessment year 2011-12 it paid transaction charges of Rs.7,87,976/- to NSE. As per the Revenue, the transaction charges paid to the stock exchanges were fee for technical services covered within the meaning of section 194J of the Act and thus, tax was required to be deducted at source accordingly. The Assessing Officer as well as the CIT(A) have referred to the judgment of the Hon'ble Bombay High Court in the case of CIT vs.Kotak Securities Ltd.(2011) 15 taxmann.com77(Bom) in support. Against such a decision, assessee is in further appeal before us.

3.

At the time of hearing, it was an agreed position that the issue relating to the transaction charges paid to stock exchanges is now settled by the Hon'ble Supreme Court in the case of CIT vs. Kotak Securities Ltd. in Civil Appeal No.3141 of 2016 & Others dated 29/03/2016, whereby it has been held that having regard to the nature of payments which are indeed paid for facilities made by the stock exchanges, no tax is deductible at source under section 194J of the Act. Pertinently the decision of the Hon'ble Bombay High Court (supra) relied upon by the lower authorities has since been reversed by the Hon'ble Supreme Court and, therefore, we are unable to uphold the orders of the authorities below treating the assessee as an assessee in default for non-deduction of tax at source under section 194J of the Act, qua the transaction charges paid to stock exchanges.

4.

In the result, appeals of the assessee are allowed as above.

Order pronounced in the open court on 16/02/2018.

More judgments on Section 194J

All 1,434 judgments and leading authorities on Section 194J →

Recent GST High Court judgments

Search GST case law →