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2012 (4) TMI 743 - AT - Income TaxDisallowance u/s 40(a)(i) for payments made to CRO’s - HELD THAT:- The Hon’ble Bombay High Court in the case of CAT Vs. Kotak Securities ltd.,[2011 (10) TMI 24 - BOMBAY HIGH COURT] held that transaction charges paid by the assessee to the stock exchange constituted fee for technical services covered U/s. 194 (J). It further held that from the year 1995 to the year 2005, the assessee as well as the revenue, proceeded on the footing that the assessee is not liable to deduct tax at source and hence no fault can be found with the assessee for not deducting tax at source, as it was under a bonafide belief that no tax need be deducted at source on this payment. In the case on hand, the assessee paid charges for testing at laboratories of CRO which used their own skills and equipments etc., to prepare the report. The Tribunal came to conclusion that there is no parting of skills or know-how by CRO and hence the service is not technical in nature, but was only a commercial service. Consisting with the view taken therein, we up-hold the finding of the first appellate authority and dismissed this ground of revenue. In the result the appeal of the revenue is allowed in part. Thus, the appeal of the assesse is dismissed and that of revenue is allowed in part.
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