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2012 (6) TMI 814 - AT - Income TaxAddition u/s 40(e)(ia) - Allowability of expenses on account of VSAT, leaseline, depository and transaction charges paid to stock exchange - AO had made disallowance on the ground that these charges were of the nature of fees for technical services and, therefore, tax was required to be deducted which was not done by the assessee - Held that:- VSAT and leaseline charges paid by assessee to stock exchange were merely reimbursement charges paid/payable by the stock exchange to department of telecommunications and, therefore, these did not have any income element and accordingly tax was not required to be deducted. Transaction charge as in earlier years i.e., assessment year 2005-06 and assessment year 2006-07 in which orders were made under section 143(3), no disallowance had been made. The assessment year 2007-08 was the first year in which disallowance was made this claim was not controverted by the ld. DR. Therefore, following the judgment of Hon’ble High Court in the case of Kotak Securities Ltd. ( 2008 (8) TMI 592 - ITAT MUMBAI) the disallowance of transaction charges in assessment year 2007-08 can not be up held. Thus order of CIT(A) deleting the addition on account of transaction charges is sustained. As regards depository charges, fees have been paid to depository for maintaining the accounts of the shares in Demat forms and for dematerializing of shares. These do not require any technical services and, therefore, disallowance of depository charges has been rightly deleted by the CIT(A). - Appeal of revenue dismissed.
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