TMI Blog2013 (5) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue did not proceed on the footing that assessee is not liable to deduct the tax at source after introduction of the provisions. - there is no need to disturb the order of the Commissioner of Income-tax (Appeals) - no tax at source was required to be deducted by the assessee with regard to lease line charges and VSAT charges. - Matter remanded back this case to the file of the Assessing Officer to verify whether the return for the assessment year 2007-08 was filed by the assessee before the completion of assessment proceedings for the assessment year 2006-07 and whether the assessee was of the bona fide belief in view of assessment made for the earlier years, that it was not liable to deduct tax from transaction charges under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance treating the same as payment for technical services on which tax was required to be deducted at source under section 194J of the Act. The learned Commissioner of Income-tax (Appeals) deleted the additions so made placing reliance on the authority of the Income-tax Appellate Tribunal styled as Kotak Securities Ltd. v. Addl. CIT dated August 26, 2008 in ITA No. 1955/Mum/2008 for the assessment year 2005-06 [2009] 318 ITR (AT) 268 (Mum). It may be observed that the Revenue had filed an appeal before the hon'ble Bombay High Court against the order of the Income-tax Appellate Tribunal in the case of Kotak Securities [2012] 340 ITR 333 (Bom). Before the hon'ble Bombay High Court, the Revenue did not press the issue relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red and held against the Revenue following the decision in the case of Deputy CIT v. Angel Broking Ltd. [2010] 3 ITR (Trib) 294 (Mum). The same principles were reiterated in the case of CIT v. Kotak Securities Ltd. [2012] 340 ITR 333 (Bom) ; [2011] 203 Taxman 86 (Bom). To the extent of VSAT, lease line charges the Revenue did not even contest. Even though the hon'ble court held that the transaction charges paid to the stock exchange constitute fees for technical services on bona fide belief it was considered that the disallowance cannot be made in that year as the Revenue did not proceed on the footing that assessee is not liable to deduct the tax at source after introduction of the provisions. Since the Commissioner of Income-tax (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2006-07 disallowance under section 40(a)(ia) was made for the first time but that year was not available by the time assessment for the assessment year 2007-08 was completed. However, this defence is not available in the assessment year 2008-09 because by that time, the Revenue has already invoked the provisions of section 40(a)(ia) and this fact was known to the assessee. Therefore, in our opinion, in view of para 31 of the decision of the hon'ble Bombay High Court in the case of Kotak Securities Ltd. [2012] 340 ITR 333 (Bom), the provisions of section 40(a)(ia) are not applicable for the assessment year 2007-08 whereas the same are applicable in the assessment year 2008-09.-CIT v. Kotak Securities Ltd. vide ITA No. 3111 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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