TMI Blog2016 (10) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... as not made, u/s 40(a)(ia). Moreover, these companies have also treated these amounts as ‘incomes’ and offered to tax. The amendment brought to provisions of Section 40(a)(ia) do apply to the facts as well. In view of these reasons the disallowance made u/s. 40(a)(ia) is hereby deleted. - Decided in favour of assessee - I.T.A. No. 1301/HYD/2014 - - - Dated:- 5-10-2016 - Shri D. Manmohan, Vice President And Shri B. Ramakotaiah, Accountant Member For Assessee : Shri P. Murali Krishna, AR For Revenue : Shri A. Sitarama Rao, DR ORDER Per B. Ramakotaiah, A. M. This is an appeal by assessee against the order of the Commissioner of Income Tax (Appeals)-III, Hyderabad dated 15-04-2014 for the AY. 2007-08. 2. Briefly sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed activity was neither in the nature of a contract and nor a professional/technical service. Therefore, TDS was not deductible and subsequently there was no applicability of Section 40(a)(ia) in the case of assessee. The AO disagreed with the same and held that provisions of section 194J were attracted. Since assessee had not deducted tax, the expenditure of ₹ 1,76,25,313/- was disallowed u/s. 40(a)(ia) of the Act. 4. Before the Ld. CIT(A) it was argued that the aforementioned addition for the AY. 2008-09 had been confirmed in appeal by the CIT(A) and also by the Hon'ble ITAT, Hyderabad. However, a Miscellaneous Application was filed with the Hon'ble ITAT and vide their order, M.A. No. 173/Hyd/2013 arising out of ITA No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly applying/interpreting the judgement of the Bombay High Court as mentioned on the matter, bu the assessee is free to explore the remedy available under the law . 15. In the result, MA filed by the assessee is dismissed . 4.4 A plain reading of the above para only indicates that the honourable ITAT has expressed its view stating that the order of the honourable Bombay High Court in the case of Kotak Securities applied by them may or may not be directly applicable. The word may does not imply that the honourable ITAT has admitted that it had made a mistake. It only shows that the ITAT expresses its view that in case the appellant feels the issue to be debatable, it has full right to go to the honourable High Court of Andhra Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices 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 more effective basis, therefore, must be made. 8. A reading of the very elaborate order of the Assessing Officer containing a lengthy discourse on the services made available by the Stock Exchange would go to show that apart from facilities of a faceless screen based transaction, a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 which, in our considered view, would require a specific notice. The service made available by the Bombay Stock Exchange [BSE Online Trading (BOLT) System] for which the charges in question had been paid by the appellant assessee are common services that every member of the Stock Exchange is necessarily required to avail of to carry out trading in securities in the Stock Exchange. The view taken by the High Court that a member of the Stock Exchange has an option of trading through an alternative mode is not correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. For the aforesaid reasons, we hold that the view taken 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 . 9. Similarly, in assessee s case also there is no human element and services are fully automated. Moreover, there is no exclusivity and the NSDL/CDSL renders service to many other clients. Since the facts are similar to the facts in the case of Kotak Securities Ltd decided by the Hon'ble Supreme Court, we are o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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