GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (3) TMI 1026 - SUPREME COURT

2016 (3) TMI 1026 - SUPREME COURT - [2016] 383 ITR 1 - TDS u/s 194J - transaction charges paid by a member of the Bombay Stock Exchange to transact business of sale and purchase of shares - whether amounts to payment of a fee for 'technical services' rendered by the Bombay Stock Exchange? - Held that:- There is no exclusivity to the services rendered by the Stock Exchange and each and every member has to necessarily avail of such services in the normal course of trading in securities in the Stoc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aken by the Bombay High court that the transaction charges paid to the Bombay Stock Exchange by its members are for 'technical services' rendered is not an appropriate view. Such charges, really, are in the nature of payments made for facilities provided by the Stock Exchange. No TDS on such payments would, therefore, be deductible under Section 194J of the Act. - Civil Appeal No. 3141 of 2016 with Civil Appeal No. 3143, 3145, 3146, 3150, 3151, 3152 and 3154, 3155 and 3156 of 2016 - Dated:- 29-3 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

il) No.17553 of 2015], CIVIL APPEAL NO._3152 OF 2016 [Arising out of Special Leave Petition (Civil) No.5893 of 2015], CIVIL APPEAL NO.3154 OF 2016 [Arising out of Special Leave Petition (Civil) No.17549 of 2015], CIVIL APPEAL NO.3155 OF 2016 [Arising out of Special Leave Petition (Civil) No.18394 of 2015] AND CIVIL APPEAL NO.3156 2016 [Arising out of Special Leave Petition (Civil) No.8294 of 2016 @ CC NO.3427 of 2016] JUDGMENT Ranjan Gogoi, J. 1. Leave granted in all the Special Leave Petitions. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f sale and purchase of shares amounts to payment of a fee for 'technical services' rendered by the Bombay Stock Exchange. Therefore, under the provisions of Section 194J of the Income Tax Act, 1961 (for short the Act ), on such payments TDS was deductible at source. The said deductions not having been made by the appellant - assessee, the entire amount paid to the Bombay Stock Exchange on account of transaction charges was not deducted in computing the income chargeable under the head pr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Assessment Year in question, benefit, in the facts of the case, should be granted to the appellant - assessee and the disallowance made by the Assessing Officer under Section 40(a)(ia) of the Act must be held to be not correct. 4. Aggrieved by the finding that transaction charges paid to the Stock Exchange are fees for technical services , the assessee - Kotak Securities Ltd. is in appeal before us whereas the Revenue seeks to challenge the later part of the order of the High Court set out above .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s arising for determination in the present appeals may now be noticed. Section 194J; Section 40(a)(ia) of the Act introduced by Finance (No.2) Act, 2004 with effect from 1st April, 2005; and Explanation 2 of Section 9(1)(vii) which are relevant for the purpose of the present case reads as under: 194J. Fees for professional or technical services. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of- (a) fees for profess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the purposes of this section,- (a)............................ (b) "fees for technical services" shall have the same meaning as in Explanation 2 to clause (vii) of sub-section (1) of section 9; ….............................. 40. Amounts not deductible. Notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head Profits and gains of business or profession (a) in the case of any asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or in the subsequent year before the expiry of the time prescribed under sub-section (1) of section 200: Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted in the previous year but paid in any subsequent year after the expiry of the time prescribed under sub-section (1) of section 200 such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid. Explanation.-......... 9. Inco .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries". 6. What meaning should be ascribed to the word technical services appearing in Explanation 2 to clause (vii) to Section 9(1) of the Ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ces . 7. Managerial and consultancy services and, therefore, necessarily technical services , would obviously involve services rendered by human efforts. This has been the consistent view taken by the courts including this Court in Bharti Cellular Ltd. (supra). However, it cannot be lost sight of that modern day scientific and technological developments may tend to blur the specific human element in an otherwise fully automated process by which such services may be provided. The search for a mor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s provided for by the Stock Exchange. All such services, fully automated, are available to all members of the stock exchange in respect of every transaction that is entered into. There is nothing special, exclusive or customised service that is rendered by the Stock Exchange. Technical services like Managerial and Consultancy service would denote seeking of services to cater to the special needs of the consumer/user as may be felt necessary and the making of the same available by the service pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ay approach the service provider for such assistance/service. It is only service of the above kind that, according to us, should come within the ambit of the expression technical services appearing in Explanation 2 of Section 9(1)(vii) of the Act. In the absence of the above distinguishing feature, service, though rendered, would be mere in the nature of a facility offered or available which would not be covered by the aforesaid provision of the Act. 9. There is yet another aspect of the matter .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e mode is not correct. A member who wants to conduct his daily business in the Stock Exchange has no option but to avail of such services. Each and every transaction by a member involves the use of the services provided by the Stock Exchange for which a member is compulsorily required to pay an additional charge (based on the transaction value) over and above the charges for the membership in the Stock Exchange. The above features of the services provided by the Stock Exchange would make the sam .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version