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2013 (7) TMI 259 - AT - Income TaxNon deduction of tax at source u/s.194J on VSAT charges, transaction charges and lease line charges, paid to the National Stock Exchange (NSE) - Held that:- It is inconceivable that the stock exchanges are not filing their returns of income or not disclosing the impugned sums in their accounts, which are in fact for most part transmitted by them to the entities providing the corresponding services, i.e., the service providers. The payment thereto is thus by the respective stock exchange, and which in turn stands reimbursed in its respect by its individual members, as it is for their ultimate benefit that the services stand availed of or secured by the Exchanges. This also forms the reason for approving non-deduction of tax at source on the payment of lease line and VSAT charges by them to the stock exchanges. The Revenue has not been able to rebut the assessee's claim that the current year is the first year for which such action has been taken by the Revenue in its case so that the assessee was only acting as it had been in the past, over which s. 194J has been on the statute. Grounds for the invocation of the doctrine of 'legitimate expectation' thus exist. Surely, going by the said decision, s. 194J does not get any more legitimacy on the co-option of sec. 40(a)(ia) on the statute. At the same time, without doubt, a continued stand by the assessee for a subsequent year/s would however imply that it has chosen to contest the Revenue's stand, and which can therefore only be at its own peril, so that it could not be allowed any benefit of doubt in view of non-action by the Revenue despite the provision of s.194J being on the statute for over a decade, the scope of which and, consequently, that of s.40(a)(ia), gets resolved per the said decision, and which is though applicable from an anterior date, i.e., AY 2005-06. As such following the ratio of the decision in the case of Kotak Securities Ltd. (2011 (10) TMI 24 - Bombay High Court) disallowance u/s.40(a)(ia) for the current year would not obtain in the assessee's case. In favour of assessee.
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