2015 (10) TMI 757

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..... Rebate u/s 88E of the Act or after allowing the rebate. (b) Whether the transaction charges paid to BSE/NSE is not liable to disallowed us 40(a)(ia) of the Act for non-deduction of tax at source. 2. We have heard the parties and perused the record. The assessee company is engaged in the business of Share broking, trading and investment in shares. We shall first take up the issue relating to the disallowance made u/s 40(a)(ia) of the Act. The assessee had paid transaction charges of Rs. 98,85,800/- and VSAT charges/lease line charges of Rs. 4,35,363/- to BSE/NSE without deducting tax at source under any of the provisions of the Act. The AO held that the above said payments are liable for Tax deduction at source u/s 194J of the Act, as they .....

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..... nearly a decade that tax was not deductible at source on payment of transaction charges, no fault can be found with the assessee in not deducting the tax at source in the assessment year in question consequently disallowance made by the assessing officer under section 40(a)(ia) of the Act in respect of the transaction charges cannot be sustained. We made it clear that we have arrived at the above conclusion in the peculiar facts of the present case, where both the revenue and the assessee right from the insertion of section 194J in the year 1995 till 2005 proceeded on the footing that the assessee is not liable to deduct tax at source and in fact immediately after the assessment year in question, i.e. from A.Y. 2006-07 the assessee has bee .....

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..... the tax after deducting the rebate allowable u/s 88E of the Act. However, the assessee contended that the tax liability under both the provisions should be compared before deducting rebate u/s 88E of the Act. The AO did not agree with the contentions of the assessee and held that, if the tax payable after allowing rebate u/s 88E works out to less than 10% of the Book Profit, the provisions of sec. 115JB shall be applicable. The AO noticed that the tax payable under the normal provisions of the Act after giving rebate u/s 88E of the Act was Rs. 98,02,699/- and the same worked out to less than 10% of Book Profit computed u/s 115JB of the Act. Accordingly, the AO held that the book profit shall be deemed to be the total income and hence the t .....

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