SHCIL SERVICES LTD,MUMBAI vs. ACIT CIR 4(2), MUMBAI

This Tribunal by order dated 28.8.2014 in ITA No.1796/Mum/2011 decided this issue against the Assessee by following the jurisdictional High Court in the case of CIT Vs. Kotak Securities Ltd [340 ITR 333]. Subsequently, the Hon’ble Supreme Court reversed the decision of the jurisdictional High Court in the case of CIT Vs. Kotak Securities Ltd, wherein, it was held that the view taken by the Hon’ble Bombay High Court that the transaction charges paid to the Bombay Stock Exchange by its members are for technical services rendered is not an appropriate view. It was held that such charges are in the nature of payments made for facilities provided by the Stock Exchange and no TDS on such payments would therefore be deductible u/s 194J of the Act. In view of this decision of the Hon’ble Supreme Court, the appeal of the Revenue was recalled by this Tribunal in MA No.106/Mum/2010 dated 31.2.2017 to dispose off the ground in consonance with the decision of the Hon’ble Supreme Court in the case of CIT Vs. Kotak Services Ltd. Therefore, respectfully following the said decision, we decide this issue in favour of the Assessee and against the Revenue. Assessing Officer is directed to delete the disallowance made u/s 40(a)(ia) in respect of transaction charges paid by the Assessee to Stock Exchange.

In the result, appeal of the Revenue on this ground is dismissed. Order pronounced in the open court on the 12th day of May 2017.