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

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.

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.

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.

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

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

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