DCIT, NEW DELHI vs. M/S. OM PIZZA & EATS INDIA PVT. LTD., NEW DELHI

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ITA 6471/DEL/2015Status: DisposedITAT Delhi18 September 2017AY 2012-135 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that charges for credit card services and swipe machines are not considered commission under Section 194H. Therefore, TDS was not required to be deducted on these payments.

What were the facts?

The Assessing Officer disallowed expenses of Rs. 44,81,395/- for commission paid to a bank without deducting TDS. The assessee argued that the charges were not commission and therefore Section 194H was not applicable.

What were the issues?

Whether charges paid to a bank for credit card services and swipe machines constitute 'commission' requiring TDS deduction under Section 194H.

Which sections of the Income-tax Act were involved?

Section 194H,Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’ : NEW DELHI

Before: SHRI B.P. JAIN & SHRI KULDIP SINGH

For Respondent: Shri Arun Kumar Yadav, Senior DR
Hearing: 30.08.2017

per Notification No.56/2012, CIT (A) proceeded to delete the addition made by the AO by relying upon the decision rendered by ITAT, Mumbai in case of Kotak Securities Limited vs. DCIT.

8.

Assessee in its submissions made before the ld. CIT (A) also relied upon the judgment of Hon’ble Delhi High Court in case cited as CIT vs. JDS Apparels Private Limited passed in dated 18.11.2014 wherein it is held by Hon’ble High Court that charges deducted by Bank for use of Swipe Machines for sales through credit cards is not commission and hence TDS is not deductible and as such, section 194H is not applicable.

9.

In view of what has been discussed above and following the decision rendered by Hon’ble Delhi High Court in case cited as CIT vs. JDS Apparels Private Limited (supra), we are of the considered view that the assessee was not required to deduct TDS on credit card commission and services charges which is outside the purview of section 194H. Hence, we find no illegality or perversity in the impugned order and consequently present appeal filed by the Revenue is hereby dismissed. Order pronounced in open court on this 18th day of September, 2017.

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