TMI Blog2010 (6) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... AT charges, lease line charges and transaction charges u/s 40(a)(ia) of the Act on the ground that TDS has not been deducted in terms of section 194J. The second issue is the disallowance of depreciation on motor vehicle on the ground that the same has been registered in the name of the Director and not in the name of the company. The third issue is whether the explanation to section 37(1) is applicable for penalties levied by SEBI for breach of certain operational regulations. 3. We have heard Mr. Piyush Jain, learned DR and Mr. Deepak Shah, learned counsel for the assessee. 4. On a careful consideration of the facts and circumstances of the case and on a perusal of the papers on record and the orders of the authorities below as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f fee for technical services , within the meaning of definition given in Explanation 2 to section 9(1)(vii) as it is neither any managerial nor technical nor consultancy services. Therefore, I hold that provisions of section 194J are not attracted on the VSAT charges amounting to ₹ 1,18,500/-. Therefore, no disallowance could be made on this amount u/s 40a(ia). Thus, the appellant gets relief on this limited point. This decision is in line with the judgment of the Hon ble Madras High Court in the case of Skycell Communications Ltd. Anr. Vs. DCIT 251 ITR 53 as well as the judgment of the Hon ble Delhi High court in the case of CIT vs. Bharti Cellular Ltd. 220 CTR 9 (Del) 228. The Mumbai D-Bench of the Tribunal in the case of Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Applying the propositions laid down in both the cases to the facts of this case, we have to uphold the order of the first appellate authority as far as VSAT charges are concerned. But as far as lease-line charges and transaction charges are concerned, the order of the first appellate authority has to be necessarily reversed as the findings are not in consonance with the decision of the Tribunal in the case Pacific Internet (India) (P) Ltd. (supra) as well as the decision of the Mumbai A Bench of the Tribunal in the case of Kotak Securities Ltd. vs. Addl. CIT, 25 SOT 440 (Mum), wherein it is held as follows : Section 194J, read with section 40a(ia) of the Income-tax Act, 1961 Deduction of tax at source Technical services fee Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO disallows depreciation on motor car is that the registration is not done in the name of the company. This conclusion of the AO is wrong. The Hon ble Bombay High Court in the case of CIT vs. Dilip Singh Sardarsingh Bagga 201 ITR 995 held that registration under the Motor Vehicles Act, is not an essential prerequisite for the acquisition of ownership of the motor vehicle and that an assessee purchasing a motor vehicle for valuable consideration and using the same for his business cannot be denied benefit of depreciation on the ground that transfer was not recorded under Motor Vehicle Act. The Delhi A-Bench of the Tribunal in the case of Usha Rectifier Corporation (I) Pvt. Ltd. vs. IAC 35 TTJ 602 held as follows : Depreciation Ownershi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the context of the risk management, rather than as a penal provision for punishing the defaulters or deeming the transactions illegal. In view of the same, it was opined that with or without the provisions of the margin money the loss could not be held as illegal loss denying the benefit of set off of same against the income or allowing the same against the income or allowing the same to carry forward to the later years. The order of the Commissioner (Appeals) therefore did not call for any interference. HELD-II The amount paid was a penalty levied for violation of the margins imposed by the SEBI on the share brokers. From the notifications issued by the SEBI, it was found that such margins were imposed in order to reduce the risk c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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