TMI Blog2013 (5) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... view that no TDS is deductible in respect of payment of transaction charges prior to the assessment year 2006-07. Further, when the issue has been decided in favour of the assessee by the Tribunal for the AY 2006-07, then no doubt about the bonafide of the claim of the assessee under belief that no tax at source was required to be deducted u/s 194J. Further, it is to be noted that the assessee filed its return of income for the year under consideration on 24.10.2007 and even till the said date, no disallowance was made by the revenue u/s 40(a)(ia) in respect of transaction charges paid because the assessment order for the AY 2006-07 was passed on 22.12.2008. Thus as that first time the AO has disallowed the transaction charges by invoki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot deducted tax at source on such expenditure. 2.1 On appeal, the Commissioner of Income Tax(Appeals) has allowed the claim of the assessee by following the orders of this Tribunal for the Assessment Year 2006-07 as well as in the case of M/s Kotak Securities Ltd . 3 We have heard the ld DR as well as the ld AR and carefully perused the relevant records. The ld AR has relied upon the decision of the Hon'ble High Court in the case of Commissioner of Income-tax v. Kotak Securities Ltd., reported in 340 ITR 333 and submitted that the claim of the assessee is bonafide. There is no dispute that prior to the assessment year 2006-07, there was no disallowance on account of transaction charges under section 40 (a)(ia). The honourable High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is further relevant to note that it is not the case of the Revenue that on account of the failure on the part of the assessee to deduct tax at source, the Revenue has suffered presumably because, the stock exchange has discharged its tax liability for the assessment year in question. In any event, in the facts of the present case, in view of the undisputed decade old practice, the assessee had bona fide reason to believe that the tax was not deductible at source under section 194J of the Act and, therefore, the Assessing Officer was not justified in invoking section 40(a)(ia) of the Act and disallowing the business expenditure by way of transaction charges incurred by the assessee." 3.1 It is clear that though the honourable High Court h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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