ASST CIT CIR 6(2), MUMBAI vs. CLEAR TRIP TRAVEL P.LTD, MUMBAI

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ITA 7352/MUM/2014Status: DisposedITAT Mumbai15 November 2016AY 2009-103 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 confirmed the CIT(A)'s deletion of the disallowance, following a coordinate bench's decision and a Delhi High Court ruling. It was held that no principal-agent relationship existed, thus no TDS was required.

What were the facts?

The assessee made payments to credit card agencies/banks as collection charges and did not deduct TDS, treating them as financial charges. The AO viewed these as commission and required TDS under Section 194H.

What were the issues?

Whether payments to credit card agencies for collection charges are in the nature of commission requiring TDS under Section 194H, and if non-deduction leads to disallowance under Section 40(a)(ia).

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 194H,Section 201(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” Bench, Mumbai

Before: Shri B.R. Baskaran (AM) & Shri Pawan Singh (JM)

For Appellant: Shri M.B. Advani
For Respondent: Shri Subhachan Ram
Hearing: 15.11.2016Pronounced: 15.11.2016

Heard together (2 matters)

I.T.A. No. 7352/Mum/2014
I.T.A. No. 7353/Mum/2014

Read from the judgment's own cause title. This page is filed under one of them.

Both the appeals filed by the Revenue are directed against the orders passed by the learned CIT(A)-12, Mumbai and they relate to A.Y. 2009-10 & 2010-11. Since the issue urged in both these appeals is identical in nature, they were heard together and are being disposed of by this common order, for the sake of convenience.

2.

Solitary issue urged in these appeals is whether the learned CIT(A) was justified in deleting the disallowance made u/s. 40(a)(ia) of the Act for non- deduction of tax at source from the payments made to the credit card agencies/banks as collection charges.

2 M/s. Clear Trip Travel Pvt. Ltd.

3.

We have heard the parties and perused the record. The assessee company is engaged in the business of providing travel related assistance lime air ticket books, rail ticket bookings, hotel bookings etc. During the year under consideration it has paid credit card collection charges to banks and other agencies. The assessee did not deduct tax at sources form the said payment by treating the same as financial charges. However, the AO took the view that the same is in the nature of commission and the assessee should have deducted tax at source u/s 194H of the Act. The Ld CIT(A) however deleted the same by following his decision rendered on identical issue in the proceedings initiated u/s. 201(1) of the Act for non deduction of tax at source from payments made to the credit cards agencies/bank.

4.

Learned Counsel submitted that the learned CIT(A) had deleted the demand raised u/s. 201(1) of the Act and the same has been confirmed by the Coordinate Bench of the Tribunal vide its order dated 16.5.2016 passed in assessee’s own case in relating to A.Y. 2010-11. He submitted that the Tribunal has already held that the assessee is not liable to deduct tax at source from the payments made to the credit card agencies/bank, since there is no principal agent relationship between the assessee and the credit card agencies/bank. He submitted that the view taken by the Tribunal is also getting support from the decision rendered by the Hon'ble Delhi High Court in the case of JDS Apparels Pvt. Ltd. (ITA No. 608/2014 dated 18.11.2014). Accordingly he submitted that the orders passed by the learned CIT(A) need to the confirmed.

5.

On the contrary, learned Departmental Representative strongly supported the orders passed by the Assessing Officer.

6.

Having heard the rival contentions, we are of the view that the orders passed by the learned CIT(A) does not call for any interference, since his view has already been upheld by the Coordinate Bench of the Tribunal in assessee’s own case in the proceedings related to section 201(1) of the Act and further

3 M/s. Clear Trip Travel Pvt. Ltd. supported by the decision rendered by Hon'ble Delhi High Court in the case of JDS Apparels Pvt. Ltd. (supra). Accordingly we confirm the orders passed by Ld CIT(A) in both the years.

7.

In the result, both the appeals filed by the Revenue are dismissed.

Order has been pronounced in the Court on 15.11.2016

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