ITO 4(1)(2), MUMBAI v. IDBI CAPITAL MARKET SERVICES LTD, MUMBAI

ITA 6392/MUM/2009 | 2006-2007
Pronouncement Date: 23-07-2010 | Result: Dismissed

Appeal Details

RSA Number 639219914 RSA 2009
Assessee PAN AAACI1268F
Bench Mumbai
Appeal Number ITA 6392/MUM/2009
Duration Of Justice 7 month(s) 12 day(s)
Appellant ITO 4(1)(2), MUMBAI
Respondent IDBI CAPITAL MARKET SERVICES LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-07-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 23-07-2010
Assessment Year 2006-2007
Appeal Filed On 11-12-2009
Judgment Text
1 ITA NO. 6392/MUM/2009 IDBI CAPITAL MARKET SERVICES LTD IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I MUMBAI BEFORE SHRI R S PADVEKAR JM & SHRI RAJENDRA SINGH JM ITA NO. 6392/MUM/2009 (ASST YEAR 2006-07) THE INCOME TAX OFFICER WARD 4(1)(2) MUMBAI VS IDBI CAPITAL MARKET SERVICES LTD 5 TH FLOOR MAFATLAL CENTRE NARIMAN POINT MUMBAI 21 (APPELLANT) (RESPONDENT) PAN AAACI1268F ASSESSEE BY: SHRI N C JAIN REVENUE BY: SHRI SUMEET KUMAR O R D E R PER R S PADVEKAR: IN THIS APPEAL THE REVENUE HAS CHALLENGED THE IMP UGNED ORDER OF THE LD CIT(A)-8 MUMBAI FOR THE ASSESSMENT YEAR 2006-07 DATED 14.9.2009 AND HAS TAKEN THE FOLLOWING EFFECTIVE GROUND: ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 1 43 14 754/- MADE IN RESPECT OF VSAT LEASELINE AND TRANSACTION CHARGES U/S 40(A)(IA) WITHOUT APPRECIATING THE FACTS THAT THESE WERE COMP OSITE CHARGES FOR PROFESSIONAL AND TECHNICAL SERVICES RENDERED BY THE STOCK EXCHANGE TO ITS MEMBERS AND THE ASSESSEE HAS FAILED TO DEDUCT TDS THEREON. 2 WE HAVE HEARD THE PARTIES. THE SHORT ISSUE FOR O UR CONSIDERATION IS WHETHER VSAT AND TRANSACTION CHARGES PAID BY THE AS SESSEE COMPANY TO THE STOCK EXCHANGE ARE IN THE NATURE OF TECHNICAL SERVI CES OR NOT. 2 ITA NO. 6392/MUM/2009 IDBI CAPITAL MARKET SERVICES LTD 2.1 THE ASSESSEE HAS CLAIMED EXPENDITURE TOWARDS TR ANSACTION CHARGES OF RS.7 82 981/- PAID TO BSE; RS. 42 67 671/-PAID TO N SE; RS.91 47 135/- TO CEIL AND ALSO VSAT CHARGES OF RS. 1 16 967/- AGGRE GATING THE CLAIM OF EXPENDITURE TO THE EXTENT OF RS. 1 43 14 754/-. IN THE OPINION OF THE AO THE SAID PAYMENTS PARTAKE THE CHARACTER OF FEES FOR TE CHNICAL SERVICES AND THE ASSESSEE HAS NOT DEDUCTED THE TAX AT SOURCE (TDS); HENCE IN VIEW OF SEC. 40(A)(IA) OF THE ACT THE SAID EXPENDITURE IS NOT A LLOWABLE. HE THEREFORE MADE THE DISALLOWANCE OF THE ENTIRE EXPENDITURE MEN TIONED ABOVE WHICH WAS TO THE EXTENT OF RS. 1 43 14 754/-. 3 ON APPEAL THE LD CIT(A) DELETED THE ADDITION BY FOLLOWING THE DECISION OF THE ITAT MUMBAI BENCHES IN THE CASE OF KOTAK SE CURITIES VS ACIT (124 TTJ 241 (MUM) (ITA NO.1955/MUM/08 DATED 26.8.2008 ). 4 THE LD DR FAIRLY CONCEDED THAT THE LD CIT(A) HAS FOLLOWED THE ORDER OF THE TRIBUNAL. 5 IT IS ALSO SEEN THAT THIS ISSUE IS COVERED IN FAV OUR OF THE ASSESSEE BY THE FOLLOWING DECISIONS: I) SKYCELL COMMUNICATION LTD VS DCIT (251ITR 53(MAD ) II) PACIFIC INTERNET INDIA LTD VS ITO (125 TTJ 966 (MUM)/(2009) 27 SOT 523 WE THEREFORE FOLLOWING THE PRINCIPLES LAID DOWN B Y THE ABOVE DECISIONS CONFIRM THE ORDER OF THE LD CIT(A). 3 ITA NO. 6392/MUM/2009 IDBI CAPITAL MARKET SERVICES LTD 5 IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 23 RD DAY OF JULY 2010. SD/- SD/- ( RAJENDRA SINGH ) ACCOUNTANT MEMBER (R S PADVEKAR ) JUDICIAL MEMBER PLACE: MUMBAI : DATED23RD JULY 2010 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI