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2011 (10) TMI 172 - HC - Income TaxTDS on various charges paid to Stock Exchange - disallowance u/s 40(a)(ia) - Held that:- Charges paid to Stock Exchange viz. VSAT charges, lease line charges, Transaction charges are in the nature of reimbursement of charges paid by the Members of Stock Exchange in lieu of infrastructure and trading facilities provided by the stock exchange and cannot be said to be a fee paid in consideration of the stock exchange rendering any technical or managerial services to the assessee. The provisions of section 194J are not attracted. - Consequently, the provisions of section 40(a)(ia) are not attracted . See The Income Tax Commissioner Mumbai City 4 vs. Angel Capital & Debit Market Ltd., Kotak Securities Ltd. Vs ACIT [2008 (8) TMI 592 - ITAT MUMBAI]. - Decided in favor of the assessee. Disallowance of penalty u/s 37 of the Act - Business expenditure - Held that:-penalty/payments made by the Assessee to the Stock Exchange for violation of their regulation, being risk management oriented, are not an account of an offence which is prohibited by law.Hence, the invocation of explanation to section 37 is not justified.See Master Capital Services Ltd. Vs. DCIT [2007 (2) TMI 241 - ITAT CHANDIGARH-A]. - Decided against the Revenue.
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