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2014 (2) TMI 686 - AT - Income TaxDisallowance of transaction charges u/s 40(a)(ia) of the Act – Held that:- The decision in Techno Shares & Stocks Ltd. v. CIT [2010 (9) TMI 6 - SUPREME COURT OF INDIA] and T.R.F. Ltd. v. CIT [2010 (2) TMI 211 - SUPREME COURT] followed – the transaction charges paid by the assessee to stock exchange constitute fees for technical services u/s. 194J of the Act - the assessee was liable to deduct tax at source while crediting the transaction charges to the account of stock exchange – there was no infirmity in the findings of CIT(A) for disallowing expenditure relating to transaction charges – Decided against Assessee. Calculation of Indexation benefit – Cost of Acquisition of shares – Held that:- As per the express provisions for determining the holding period of capital asset being equity shares allotted in pursuance to demutualisation or corporatisation of a recognised stock exchange in hand, the period for which the assessee was a member of the recognised stock exchange prior to such demutualisation or corporatisation shall also be included - the holding period of the asset is to be calculated from the acquisition of date of 'BSE card' and not from the date of conversion of 'BSE card' into equity shares - As per the section 55(2)(ab) of the Act, the cost of acquisition in relation to equity shares allotted to a shareholder under a scheme of demutualisation or corporatisation shall be the cost of acquisition of his original membership of the exchange - The cost of acquisition of 'BSE card' shall be the cost of acquisition of BSE shares and the shares are deemed to be acquired on the date of acquisition of 'BSE card' and not from the date of their conversion – thus, the date of holding/acquisition of an asset being equity shares allotted pursuant to demutualisation or corporatisation of a recognised stock exchange will be the date of acquisition of original 'BSE card' – thus, the enhancement of income made by the CIT(A) on this account is set aside – Decided in favour of Assessee.
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