MOTILAL OSWAL COMMODITIES BROKERS P.LTD, MUMBAI V. DCIT CC 22, MUMBAI

ITA 5071/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0218 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 16-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Keywords: Deemed to accrue or arise in india
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE D.T. GARASIA, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.5071/M/2015 ASSESSMENT YEAR: 2011-12 M/S. MOTILAL OSWAL COMMODITIES BROKER PVT. LTD., MOTILAL OSWAL TOWER, RAHIMTULLAH SAYANI ROAD, OPP. PAREL ST DEPOT, PRABHADEVI, MUMBAI PAN: AAACP 3147N VS. DY. CIT CC-3(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI GOVIND JAVERI, A.R. REVENUE BY : SHRI SUMAN KUMAR, D.R. DATE OF HEARING : 13.07.2017 DATE OF PRONOUNCEMENT : 18.08.2017 O R D E R PER D.T. GARASIA , JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 28.07.2015 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2011-12. 2. THE ONLY GROUND IN THIS APPEAL IS REGARDING DISA LLOWANCE OF LEASE LINE CHARGES OF RS.3,06,360/- UNDER SECTION 40(A)(IA) OF THE ACT. DURING THE YEAR, THE ASSESSEE MADE PAYMENT OF LEASE LINE CHARGES OF RS.3,06,360/- TO MTNL MUMBAI, MCX AND TATA TELESERVICES. IT IS GROUPED U NDER THE HEAD 'TELEPHONE & LEASE LINE CHARGES' IN THE PROFIT AND LOSS A/C. NO TDS WAS DEDUCTED ON THE SAID EXPENSES. THE ASSESSEE GAVE A DETAILED REASONING SUPPORTED BY VARIOUS CASE LAWS FOR NON-APPLICABILIT Y OF THE PROVISIONS OF SECTION 194J AND THUS NO DISALLOWANCE CAN BE MADE U /S 40(A)(IA) OF THE ACT. ITA NO.5071/M/2015 M/S. MOTILAL OSWAL COMMODITIES BROKER PVT. LTD. 2 THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS T HE AO) DISALLOWED THE ENTIRE EXPENSES U/S 40(A)(IA) STATING THAT NO TDS WAS DEDU CTED ON THE SAME U/S 194J RELYING ON THE ASSESSMENT ORDER OF AY 2008-09 WHERE IN SIMILAR DISALLOWANCE WAS MADE. BROADLY FOLLOWING REASONING ARE GIVEN BY THE AO IN AY 2008-09 FOR MAKING THE DISALLOWANCE: A) THE AO STATED THAT THESE CHARGES ARE DEPENDENT ON Q UANTUM OF DEALINGS AND NUMBER OF BOLTS OPERATED. FURTHER, IT IS NOT A STANDARDIZED SERVICE AVAILABLE TO PUBLIC AT LARGE, BUT IT IS AVAILABLE ONLY TO REGISTERED MEMBERS OF EXCHANGE. IT IS NOT A ONE WAY PROCESS BUT A COMPLETE INTERACTION BETWEEN THE BROK ER AND THE EXCHANGE THROUGH VSATS / LEASED LINES WHICH ENSURES THAT THE DESIRED MARKET DATA IS PROVIDED TO THE BROKER FOR E XECUTING ORDERS PLACED AND BRING BACK EXECUTED TRADES. B) THERE IS A THIN LINE OF DEMARCATION BETWEEN TECHNIC AL SERVICES FROM ORDINARY USE OF TECHNOLOGY. THE VALUE ADDITION TO A VERY BASIC TECHNOLOGY IS WHAT DISTINGUISHES A TECHNICAL SERVICE FROM THAT OF AN ORDINARY TECHNOLOGY. TRANSACTION CHARGE S ARE COLLECTED FOR A VALUE ADDITION MADE TO A HOST OF DIFFERENT SE RVICES. C) JUST A FACT THAT THE SERVICES ARE RENDERED BY A COM PUTER SYSTEM OR NETWORK DOES NOT TAKE THEM OUT OF THE PURVIEW OF SE RVICE. 3. MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4. DURING THE COURSE OF HEARING, THE LD. A.R. SUBMI TTED THAT IN ASSESSEES OWN CASE IN ITA NO.335/M/2013 & 650/M/2014 FOR A.Y. 2009-10 & 2010-11 RESPECTIVELY THE SIMILAR ISSUE HAD BEEN DECIDED BY THE TRIBUNAL WHEREIN THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE AS SESSEE, THEREFORE, THIS APPEAL MAY BE ALLOWED. 5. LD. D.R. HAD NO OBJECTION, IF THE MATTER IS DECI DED ACCORDINGLY. ITA NO.5071/M/2015 M/S. MOTILAL OSWAL COMMODITIES BROKER PVT. LTD. 3 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE ISSUE IN CONTROVERSY IS COVERED BY THE DECISION OF TRIBUNAL IN THE OWN CASE OF THE ASSESSEE WHEREIN THE TRIBUNAL HAS ALLOWED THE A PPEAL BY OBSERVING AS UNDER: 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE TRIBUNAL FOR ASSESSMENT YEAR 2008-09 IN THE CASE OF DY. CIT VS. M/S. ANGEL COMMODITIES (ITA NO. 7026/MUM/2011, DATED 10/07/2013) CONSIDERED THE ISSUE. THE RELEVANT PORT ION OF THE SAME IS REPRODUCED HEREUNDER:- '2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.10,08,5 86/- BY HOLDING THAT VSAT AND LEASE LINE CHARGES CAN NOT BE CONSIDERED AS REN DERING OF TECHNICAL SERVICES AND HENCE PROVISIONS OF SECTION 40(A)(IA) WERE NOT ATTRACTED.' 3.1 THE ISSUE IS WITH REFERENCE TO DELETION OF THE ADDITION OF RS.18,08,586/- BY HOLDING THAT V-SAT AND LEASE LINE CHARGES CAN NO T BE CONSIDERED AS RENDERING OF TECHNICAL SERVICES, HENCE, PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE. THE AO DISALLOWED THE ABOVE AMOUNT INVO KING SECTION 40(A)(IA) ON THE GROUND THAT THE ASSESSEE FAILED TO COMPLY WI TH THE APPLICABLE TDS PROVISIONS. THE LD. CIT(A) FOLLOWING THE DECISION O F CO-ORDINATE BENCHES IN THE CASE OF KOTAK MAHINDRA SECURITIES (25 SOT 44) A ND ANGEL BROKING (35 SOT 457) ALLOWED THE CLAIM OF THE ASSESSEE. THIS IS SUE IS ALSO COVERED BY THE DECISION OF THE HON'BLE A.Y.08-09 M/S. ANGEL COMMOD ITIES BROKING P. LTD. BOMBAY HIGH COURT IN ASSESSEE'S OWN CASE FOR THE AS SESSMENT YEAR 2006-07 WHEREIN THE HON'BLE HIGH COURT UPHELD THE ORDERS OF ITAT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS. ANGEL CAPITAL AND D EBIT MARKET LTD. IN INCOME TAX APPEAL(L) NO.475 OF 2011 DATED 28TH JULY,2011. SINCE CIT'S ORDER IS IN LINE WITH THE PRINCIPLE LAID DOWN BY THE HON'BLE HI GH COURT IN THIS MATTER, THE SAME IS UPHELD. THE REVENUE GROUND IS DISMISSED . IT IS NOTED THAT THE HON'BLE JURISDICTIONAL HIGH CO URT VIDE ORDER DATED 28/07/2011 (ITA NO. 475/2011) IN THE CASE OF ASSESSEE DISMISSE D THE APPEAL OF THE REVENUE, UPHOLDING THE ORDER OF THE TRIBUNAL. IT WAS HELD BY HON'BLE HIGH COURT THAT VSAT AND LEASE LINE CHARGES PAID BY THE ASSESSEE, DO NOT HAVE ANY ELEMENT OF INCOME, THEREFORE, DEDUCTING TAX ON SUCH PAYMENT DO NOT ARI SE. IT IS ALSO NOTED THAT HON'BLE APEX COURT IN THE CASE OF CIT VS. M/S. KOTAK SECURI TIES LTD. (CIVIL APPEAL NO. 3141/2016, ORDER DATED 29/03/2016) DELIBERATED UP O N THE ISSUE AND HELD AS UNDER: 3. BY THE IMPUGNED ORDER DATED 21ST OCTOBER, 2011 PASSED IN THE AFORESAID APPEAL, THE HIGH COURT OF BOMBAY HAS HELD THAT THE TRANSACTION CHARGES PAID BY A MEMBER OF THE BOMBAY STOCK EXCHANGE TO TRANSAC T BUSINESS OF SALE AND PURCHASE OF SHARES AMOUNTS TO PAYMENT OF A FEE FOR 'TECHNICAL SERVICES' RENDERED BY THE BOMBAY STOCK EXCHANGE. THEREFORE, U NDER THE PROVISIONS OF ITA NO.5071/M/2015 M/S. MOTILAL OSWAL COMMODITIES BROKER PVT. LTD. 4 SECTION 194J OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT), ON SUCH PAYMENTS TDS WAS DEDUCTIBLE AT SOURCE. THE SAID DED UCTIONS NOT HAVING BEEN MADE BY THE APPELLANT ASSESSEE, THE ENTIRE AMO UNT PAID TO THE BOMBAY STOCK EXCHANGE ON ACCOUNT OF TRANSACTION CHA RGES WAS NOT DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER T HE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION OF THE APPELLANT ASSESSEE FOR THE ASSESSMENT YEAR IN QUESTION I.E. 2005-2006. THIS IS ON ACCOUNT OF THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. NOTWITH STANDING THE ABOVE, THE BOMBAY HIGH COURT HELD THAT IN VIEW OF THE APPARENT UNDERSTANDING OF BOTH THE ASSESSEE AND THE REVENUE WITH REGARD TO THE LIA BILITY TO DEDUCT TDS ON TRANSACTION CHARGES PAID TO THE BOMBAY STOCK EXCHAN GE RIGHT FROM THE YEAR 1995 I.E. COMING INTO EFFECT OF SECTION 194J TILL T HE ASSESSMENT YEAR IN QUESTION, BENEFIT, IN THE FACTS OF THE CASE, SHOULD BE GRANTED TO THE APPELLANT ASSESSEE AND THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER UNDER SECTION 40(A)(IA) OF THE ACT MUST BE HELD TO BE NOT CORRECT. 4. AGGRIEVED BY THE FINDING THAT TRANSACTION CHARGE S PAID TO THE STOCK EXCHANGE ARE FEES FOR TECHNICAL SERVICES, THE ASS ESSEE - KOTAK SECURITIES LTD. IS IN APPEAL BEFORE US WHEREAS THE REVENUE SEE KS TO CHALLENGE THE LATER PART OF THE ORDER OF THE HIGH COURT SET OUT ABOVE. THE ASSESSEE IS ALSO IN APPEAL AGAINST SIMILAR ORDERS PASSED IN RESPECT OF SUBSEQUENT ASSESSMENT ORDERS IN THE CASE OF THE ASSESSEE ITSELF. AS THE O RDER OF THE HIGH COURT, WITH REGARD TO TRANSACTION CHARGES BEING IN THE NATURE O F FEE FOR TECHNICAL SERVICES, HAS BEEN MADE APPLICABLE TO THE ASSESSMEN TS IN CASE OF OTHER ASSESSEES, SUCH OF THE ASSESSEES WHO ARE AGGRIEVED THEREBY HAVE FILED THE OTHER APPEALS BEFORE US. 5. THE RELEVANT PROVISIONS OF THE ACT WHICH HAVE A MATERIAL BEARING TO THE ISSUES ARISING FOR DETERMINATION IN THE PRESENT APP EALS MAY NOW BE NOTICED. SECTION 194J; SECTION 40(A)(IA) OF THE ACT INTRODUC ED BY FINANCE (NO.2) ACT, 2004 WITH EFFECT FROM 1ST APRIL, 2005; AND EXPLANAT ION 2 OF SECTION 9(1)(VII) WHICH ARE RELEVANT FOR THE PURPOSE OF THE PRESENT C ASE READS AS UNDER: 194J. FEES FOR PROFESSIONAL OR TECHNICAL SERVICES. (1) ANY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDI VIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY SUM BY WAY OF (A) FEES FOR PROFESSIONAL SERVICES, OR (B) FEES FOR TECHNICAL SERVICES OR (C) ROYALTY, OR (D) ANY SUM REFERRED TO IN CLAUSE (VA) OF SECTION 2 8 SHALL AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE PAYEE OR A T THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO FIV E PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN: ................................. ................................. ITA NO.5071/M/2015 M/S. MOTILAL OSWAL COMMODITIES BROKER PVT. LTD. 5 EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A)............................ (B) 'FEES FOR TECHNICAL SERVICES' SHALL HAVE THE S AME MEANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB-SECTION (1) OF SECTION 9; ................................. 40. AMOUNTS NOT DEDUCTIBLE. NOTWITHSTANDING ANYTHIN G TO THE CONTRARY IN SECTIONS 30 TO 38, THE FOLLOWING AMOUNTS SHALL N OT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PRO FITS AND GAINS OF BUSINESS OR PROFESSION (A) IN THE CASE OF ANY ASSESSEE- (I) ......... ..... ...... (IA) ANY INTEREST, COMMISSION OR BROKERAGE, RENT, R OYALTY, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTO R, BEING RESIDENT, FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABO UR FOR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UND ER CHAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCT ION, HAS NOT BEEN PAID DURING THE PREVIOUS YEAR, 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 TH E TIME PRESCRIBED UNDER SUB-SECTION (1) OF SECTION 200 SUCH SUM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE INCOME OF THE PREVIOUS Y EAR IN WHICH SUCH TAX HAS BEEN PAID. EXPLANATION.......... 9. INCOME DEEMED TO ACCRUE OR ARISE IN INDIA (1) THE FOLLOWING INCOMES SHALL BE DEEMED TO ACCRU E OR ARISE IN INDIA:- (I)..................... ......................... ......................... ( VII) INCOME BY WAY OF FEES FOR TECHNICAL SERVICES P AYABLE BY (A) ............... (B) ............... (C) ............... ITA NO.5071/M/2015 M/S. MOTILAL OSWAL COMMODITIES BROKER PVT. LTD. 6 EXPLANATION 2.--FOR THE PURPOSES OF THIS CLAUSE, 'F EES FOR TECHNICAL SERVICES' MEANS ANY CONSIDERATION (INCLUDING ANY LU MP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SE RVICES OF TECHNICAL OR OTHER PERSONNEL) BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDE RTAKEN 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 TEC HNICAL SERVICES APPEARING IN EXPLANATION 2 TO CLAUSE (VII) TO SECTI ON 9(1) OF THE ACT IS THE MOOT QUESTION. IN COMMISSIONER OF INCOME-TAX VS. BH ARTI CELLULAR LTD.1 THIS COURT HAS OBSERVED AS FOLLOWS: RIGHT FROM 1979, VARIOUS JUDGMENTS OF THE HIGH COU RTS AND TRIBUNALS HAVE TAKEN THE VIEW THAT THE WORDS TECHN ICAL SERVICES HAVE GOT TO BE READ IN THE NARROWER SENSE BY APPLYI NG THE RULE OF NOSCITUR A SOCIIS, PARTICULARLY, BECAUSE THE WORDS TECHNICAL SERVICES IN SECTION 9(1)(VII) READ WITH EXPLANATION 2 COMES IN BETWEEN THE WORDS MANAGERIAL AND CONSULTANCY SERVICES. 7. MANAGERIAL AND CONSULTANCY SERVICES AND, TH EREFORE, NECESSARILY TECHNICAL SERVICES, WOULD OBVIOUSLY INVOLVE SERVI CES RENDERED BY HUMAN EFFORTS. THIS HAS BEEN THE CONSISTENT VIEW TAKEN BY THE COUR TS INCLUDING THIS COURT IN BHARTI CELLULAR LTD. (SUPRA). HOWEVER, IT CANNOT BE LOST SIGHT OF THAT MODERN DAY SCIENTIFIC AND TECHNOLOGICAL DEVELOPMENT S MAY TEND TO BLUR THE SPECIFIC HUMAN ELEMENT IN AN OTHERWISE FULLY AU TOMATED 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 ASS ESSING OFFICER CONTAINING A LENGTHY DISCOURSE ON THE SERVICES MADE AVAILABLE BY THE STOCK EXCHANGE WOULD GO TO SHOW THAT APART FROM FACILITIES OF A FA CELESS SCREEN BASED TRANSACTION, A CONSTANT UPGRADATION OF THE SERVICES MADE AVAILABLE AND SURVEILLANCE OF THE ESSENTIAL PARAMETERS CONNECTED WITH THE TRADE INCLUDING THOSE OF A PARTICULAR/ SINGLE TRANSACTION THAT WOULD LEAD CREDENCE TO ITS AUTHENTICITY IS PROVIDED FOR BY THE STOCK EXCHANGE. ALL SUCH SERVICES, FULLY AUTOMATED, ARE AVAILABLE TO ALL MEM BERS OF THE STOCK EXCHANGE IN RESPECT OF EVERY TRANSACTION THAT IS EN TERED INTO. THERE IS NOTHING SPECIAL, EXCLUSIVE OR CUSTOMISED SERVICE TH AT IS RENDERED BY THE STOCK EXCHANGE. TECHNICAL SERVICES LIKE MANAGERI AL 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 PROVIDER. IT IS THE ABOVE FEATURE THAT WOULD DISTINGUISH/IDENTIFY A SERVICE PROVIDED FROM A FACI LITY OFFERED. WHILE THE FORMER IS SPECIAL AND EXCLUSIVE TO THE SEEKER OF TH E SERVICE, THE LATTER, EVEN ITA NO.5071/M/2015 M/S. MOTILAL OSWAL COMMODITIES BROKER PVT. LTD. 7 IF TERMED AS A SERVICE, IS AVAILABLE TO ALL AND WOU LD THEREFORE STAND OUT IN DISTINCTION TO THE FORMER. THE SERVICE PROVIDED BY THE STOCK EXCHANGE FOR WHICH TRANSACTION CHARGES ARE PAID FAILS TO SATISFY THE AFORESAID TEST OF SPECIALIZED, EXCLUSIVE AND INDIVIDUAL REQUIREMENT O F THE USER OR CONSUMER WHO MAY APPROACH THE SERVICE PROVIDER FOR SUCH ASSI STANCE/SERVICE. IT IS ONLY SERVICE OF THE ABOVE KIND THAT, ACCORDING TO U S, SHOULD COME WITHIN THE AMBIT OF THE EXPRESSION TECHNICAL SERVICES AP PEARING IN EXPLANATION 2 OF SECTION 9(1)(VII) OF THE ACT. IN THE ABSENCE O F THE ABOVE DISTINGUISHING FEATURE, SERVICE, THOUGH RENDERED, WOULD BE MERE IN THE NATURE OF A FACILITY OFFERED OR AVAILABLE WHICH WOULD NOT BE CO VERED 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 A VAILABLE BY THE BOMBAY STOCK EXCHANGE [BSE ONLINE TRADING (BOLT) SYSTEM] F OR WHICH THE CHARGES IN QUESTION HAD BEEN PAID BY THE APPELLANT - ASSESS EE ARE COMMON SERVICES THAT EVERY MEMBER OF THE STOCK EXCHANGE IS NECESSARILY REQUIRED TO AVAIL OF TO CARRY OUT TRADING IN SECURITIES IN T HE STOCK EXCHANGE. THE VIEW TAKEN BY THE HIGH COURT THAT A MEMBER OF THE S TOCK EXCHANGE HAS AN OPTION OF TRADING THROUGH AN ALTERNATIVE MODE IS NO T CORRECT. A MEMBER WHO WANTS TO CONDUCT HIS DAILY BUSINESS IN THE STOC K EXCHANGE HAS NO OPTION BUT TO AVAIL OF SUCH SERVICES. EACH AND EVER Y 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 FEATURE S OF THE SERVICES PROVIDED BY THE STOCK EXCHANGE WOULD MAKE THE SAME A KIND OF A FACILITY PROVIDED BY THE STOCK EXCHANGE FOR TRANSACTING BUSI NESS RATHER THAN A TECHNICAL SERVICE PROVIDED TO ONE OR A SECTION OF T HE MEMBERS OF THE STOCK EXCHANGE TO DEAL WITH SPECIAL SITUATIONS FACED BY S UCH A MEMBER(S) OR THE SPECIAL NEEDS OF SUCH MEMBER(S) IN THE CONDUCT OF B USINESS IN THE STOCK EXCHANGE. IN OTHER WORDS, THERE IS NO EXCLUSIVITY T O THE SERVICES RENDERED BY THE STOCK EXCHANGE AND EACH AND EVERY MEMBER HAS TO NECESSARILY AVAIL OF SUCH SERVICES IN THE NORMAL COURSE OF TRAD ING IN SECURITIES IN THE STOCK EXCHANGE. SUCH SERVICES, THEREFORE, WOULD UND OUBTEDLY BE APPROPRIATE TO BE TERMED AS FACILITIES PROVIDED BY THE STOCK EXCHANGE ON PAYMENT AND DOES NOT AMOUNT TO TECHNICAL SERVICES PROVIDED BY THE STOCK EXCHANGE, NOT BEING SERVICES SPECIFICALLY SOU GHT FOR BY THE USER OR THE CONSUMER. IT IS THE AFORESAID LATTER FEATURE OF A SERVICE RENDERED WHICH IS THE ESSENTIAL HALLMARK OF THE EXPRESSION TECHNI CAL SERVICES AS APPEARING IN EXPLANATION 2 TO SECTION 9(1)(VII) OF THE ACT. 10. FOR THE AFORESAID REASONS, WE HOLD THAT THE VIE W 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 SECT ION 194J OF THE ACT.' ITA NO.5071/M/2015 M/S. MOTILAL OSWAL COMMODITIES BROKER PVT. LTD. 8 7. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL, WE DECIDE THIS MATTER IN FAVOUR OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.08.2017. SD/- SD/- (RAJESH KUMAR) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 18.08.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.