SANAT M DALAL SECURITIES P.LTD,MUMBAI vs. CIT(A)-14, MUMBAI

We have heard the parties and perused the record. The Assessing Officer treated the assessee as assessee in default since the assessee did not deduct tax at source on the transaction charges paid to the stock exchange. The Assessing Officer took the view that the assessee should have deducted tax at source u/s. 194J of the Act on the amount of ` 4,37,645/- paid by the assessee to the stock exchange. Accordingly the Assessing Officer raised the demand u/s. 201(1) of the Act and levied interest u/s. 201(1A) of the Act. Learned CIT(A) also confirmed the same.

We have noticed that the above said issue has since been decided by Hon'ble Supreme Court in favour of the assessee in the case of CIT Vs. Kotak Securities Ltd. (2016) 384 ITR 1, wherein it was held that the transaction charges paid to the stock exchange is for providing facility and it is not fees for technical services and hence no tax is required to be deducted u/s. 194J of the Act. Accordingly, following the decision rendered by Hon'ble Supreme Court(supra), we set aside the order passed by learned CIT(A) and direct the Assessing Officer to delete the impugned demand raised upon the assessee u/s. 201(1) & 201(1A) of the Act.

In the result, appeal filed by the assessee is allowed.