NO TDS on VSAT /lease line charges paid to NSE/BSE

By | August 13, 2015

TDS on VSAT /lease line charges paid  to NSE/BSE

Question : Whether TDS is required to be deducted on  Fees for professional or technical services (VSAT charges) paid to NSE/ BSE?

There is no requirement to deduct tax at source from payments made to NSE/BSE towards VSAT charges and lease line charges under section 194J

IN THE ITAT MUMBAI BENCH ‘C’

Centrum Broking Ltd.

v.

Assistant Commissioner of Income-tax

H.L. KARWA, PRESIDENT
AND B.R. BASKARAN, ACCOUNTANT MEMBER

IT APPEAL NO. 3081 (MUM.) OF 2012
[ASSESSMENT YEAR 2008-09]

FEBRUARY  20, 2015

Facts of the Case :-

Section 194J, read with sections 194, of the Income-tax Act, 1961

Deduction of tax at source  on Fees for professional or technical services (VSAT charges)

Assessment year 2008-09

Assessee was a member of Bombay Stock Exchange(BSE) and National Stock Exchange(NSE) and was engaged in business of share trading and stock broking

Assessee claimed deduction of payment made for VSAT and lease line charges paid to stock exchanges Assessing Officer treated said amount as ‘fees for technical services’ and since assessee did not deduct tax at source, he disallowed said claim by invoking section 40(a)(ia)

Commissioner (Appeals) upheld order of Assessing Officer

Decision 

 

In view of decision of CIT v. Stock & Bond Trading Co. [I.T. Appeal No. 4117 of 2010, dated 14-10-2011], there was no requirement to deduct tax at source from payments made to NSE/BSE towards VSAT charges and lease line charges. Therefore, disallowance made by Assessing Officer under section 40(a)(ia) was to be deleted [Para 6] [In favour of assessee]

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