TMI Blog2014 (1) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... having been inserted on the statute by Finance (No.2) Act, 2004, w.e.f. 01.04.2005 - The non-deduction of tax at source for lease line and VSAT charges stands since confirmed by the hon'ble jurisdictional high court - As regards the transaction charges, nominality of the amount paid - deductibility or otherwise of tax at source on all the three charges under reference had been a subject matter of dispute between the assessees and the Revenue since AY 2005-06, section 40(a)(ia) would stand attracted in respect of transaction charges for the current year. Restriction of disallowance u/s 14A of the Act r.w Rule 8D of the Rules – Held that:- the decision in Godrej and Boyce Mfg. Co. Ltd. vs. Dy. CIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ('CIT(A)' for short) dated 28.10.2010, partly allowing the assessee's appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ('the Act' hereinafter) for the assessment year (A.Y.) 2007-08 vide order dated 30.11.2009. 2. We shall proceed in the matter ground-wise; the Revenue's appeal raising three grounds. The first is in respect of the disallowance in the sum of Rs.56,26,975/- u/s.40(a)(ia) in respect of lease line, VSAT and transaction charges paid by the assessee-company, a stock broker, to National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), i.e., on account of admitted non-deduction of tax at source thereon. The same stood deleted in appeal by the ld. CIT(A) following the decision by the Tribunal, among ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it was pleaded by the ld. AR, drawing support from the exception laid down for A.Y. 2005-06 by the hon'ble high court in the case of Kotak Securities (supra), that the said exception be extended for the current year as well in the assessee's case. This is for the reason that its operations were suspended for an extended period of time, and which stood commenced only in the current year, which would be apparent from the fact of the transaction charges being paid at a nominal sum of Rs.72,605/- for the current year. The tax at source has been deducted by the assessee from the following year, i.e., A.Y. 2008-09, onwards, and in support of which the assessment order u/s.144C(13) r.w.s 143(3) of the Act dated 23.10.2012 was placed by him on re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst Rs.3,96,315/- effected by the A.O. with reference to Rule 8D. 6. Before us, the cases of both the parties were much the same; each relying on the order of the authority below as favorable to it. Rule 8D is admittedly not mandatory for the current year. Under these circumstances, the ld. CIT(A), following the mandate of the decision by the hon'ble jurisdictional high court in Godrej and Boyce Mfg. Co. Ltd. vs. Dy. CIT [2010] 328 ITR 81 (Bom), restricted the disallowance u/s.14A(1) only to indirect (administrative) expenses at 0.5% of the average value of investment. In his view, the assessee having adequate funds available with it, no presumption as to the borrowings having been applied, even to the proportionate extent, in funding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r held likewise, confirming the deductibility of expenditure on entrance fees paid to a sports club. 8. We have heard the parties, and perused the material on record, including the decisions cited. During the course of the hearing, the ld. AR, placing a copy of the recent decision by the three-member Bench of the hon'ble Punjab and Haryana high court in CIT vs. Groz Beckert Asia Limited (in ITA No.366 of 2008 dated 24.01.2013), submitted that the issue stands thoroughly reviewed by the hon'ble court on the division bench expressing a doubt as to the correctness of the view of the said court in the case of CIT vs. Majestic Auto Limited (in ITA No.448 of 2007 dated 11.09.2008). It, after a review of the judicial precedents, including the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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