Saturday, June 11, 2016

Transaction charges paid to Stock Exchange don't attract sec. 194J TDS

Facts:
a) The assessee debited certain amount on account of transaction charges paid to the Stock Exchange. The Assessing Officer disallowed such charges on the ground that the assessee had not deducted tax at source while making the payment of transaction charges.

b) The Commissioner (Appeals) held that the transaction charges were paid to the Stock Exchange for rendering the managerial services which constituted fees for technical services under section 194J and, hence, the assessee was liable to deduct tax at source before crediting the transaction charges to the Stock Exchange. In that view of the matter, the disallowance was upheld.

c) The aggrieved-assessee filed the instant appeal. 

The Tribunal held in favour of assessee as under: