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2014 (5) TMI 814 - AT - Income TaxDisallowance of VSAT charges – Transaction charges paid to stock exchange u/s 40(a)(ia) of the Act – Failure to deduct TDS on composite charges paid for professional and technical service - Held that:- Following CIT vs. Angel Capital & Debit Market Ltd [2014 (5) TMI 584 - BOMBAY HIGH COURT ] - 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 payment do not arise. In Asstt. /Dy. Commr. of Income-tax (LTU) Versus DICGC Ltd. [2012 (4) TMI 240 - ITAT MUMBAI] it was held that both parties has proceeded on the footing that tax was not deductible u/s 194J - the provisions of section 40(a)(ia) could not be invoked - The VSAT and Lease Line Charges are not payments, which come in within the domain of “fees for technical services” and they are also not for “any work” done by the BSE or BSE for the member broker - The stock exchange does not provide any managerial services and the fees paid by the member to the Stock Exchange is not for any technical services rendered – thus, TDS is not required to be made on such payments – there was no infirmity in the order of the CIT(A) – Decided against Revenue.
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