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2014 (2) TMI 254 - AT - Income TaxDisallowance of leaseline charges – Disallowance for non-deduction of TDS – Held that:- The decision in Angel Capital And Debt Market Limited. Versus Assistant Commissioner Of Income-Tax [2008 (5) TMI 294 - ITAT BOMBAY-I] followed – Held that:- The findings of fact recorded by the I.T.A.T. is that VSAT and Lease Line charges paid by the assessee to Stock Exchange were merely reimbursement of the charges paid/payable by the Stock Exchange to the Department of Telecommunication - the VSAT and Lease Line Charges paid by the assessee do not have any element of income, deducting tax while making such payments do not arise. Disallowance of Penalty – Held that:- The decision in Angel Capital And Debt Market Limited. Versus Assistant Commissioner Of Income-Tax [2008 (5) TMI 294 - ITAT BOMBAY-I] followed - The amount paid as penalty was on account of irregularities committed by the assessee’s clients - Such payments were not on account of any infraction of law and hence allowable as business expenditure - the capital market regulations of the stock exchanges were in the nature of indoor management governing relations between the member and the stock exchange and not an offence punishable by the statute - the CIT(A) has rightly deleted the addition – Decided against Revenue. Disallowance u/s 40(ia) of the Act - Transaction charges paid to the stock exchanges - fees for technical services TDS u/s 194J of the Act - Held that:- The decision in Commissioner of Income-tax - 4(3) Versus Kotak Securities Ltd. [2011 (10) TMI 24 - Bombay High Court] followed – The transaction charges paid by the assessee to the stock exchange constitute 'fees for technical services' is covered u/s 194J of the Act and – thus, the assessee was liable to deduct tax at source while crediting the transaction charges to the account of the stock exchange - both the revenue and the assessee were under the bonafide 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 deducting the tax at source in the assessment year in question and consequently disallowance made by the assessing officer under Section 40(a)(ia) of the Act in respect of the transaction charges cannot be sustained – Decided in favour of Assessee. Disallowance u/s 14A of the Act r.w. Rule 8D of the Rules – Expenses in relation to income not forming part of total income - Held that:- The decision in GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] followed – the Assessing Officer is duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income under the Act - The Assessing Officer must adopt a reasonable basis or method consistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record - The matter remitted back to the AO for fresh adjudication – Decided in favour of Assessee. Disallowance u/s 40A(IB) r.w. Section 88E of the Act - STT paid on behalf of client – Held that:- There was force in the contention of the Counsel for the assessee so far as the treatment of brokerage inclusive of STT – thus, the matter remitted back to the AO for fresh adjudication – Decided partly in favour of Assessee.
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