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2010 (2) TMI 910 - AT - Income TaxDisallowance of transaction charges and VSAT charges - technical services - disallowance of claim of the assessee for deduction of the aforesaid amount by invoking provisions of section 40(a)(ia) of the Act - Stock exchanges as measures of providing infrastructure to its members provide VSAT facilities to its members to enable screen based trading in shares - Fees collected in this regard is nothing but fee paid for use of facilities provided by the stock exchange - Stock Exchanges do not provide any technical services by installing VSAT network. It is the facility provided to its members, such payment cannot be said to be nature of fees for any technical services rendered. Stock Exchanges merely provide facilities for its members to purchase and sell shares within framework of its bylaws. It also provides for a mechanism for settlement of dispute between the brokers and its customers. Stock Exchanges do not involve them in providing any technical services to any of its members – Held that:- All the above features present in screen based trading saves time. This is the result of improved technology. That does not mean that stock exchange is providing technical services. Members of the stock exchange and the public at large are beneficiaries of these technical improvements. Stock exchanges are not the owner of this technology to provide them for a fee to prospective use. They are themselves consumers of the technology. As far as transaction charges paid to stock exchange are concerned, the decision of the Mumbai ITAT in the case of Kotak Securities Ltd. (supra) relied upon by the learned CIT(A) supports the plea of the assessee. CIT(A) was right in holding that the payment in question is not fee for technical services rendered. order of learned CIT(A) confirmed and dismiss this appeal of the revenue
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