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Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI
Before: SHRI R.C.SHARMA
O R D E R This is an appeal filed by the revenue against the order of CIT(A)- Mumbai, for the assessment year 2011-2012.
In this appeal the revenue is aggrieved for holding that assessee was not in default u/s.201(1)/201(1A) of the I.T.Act.
2. Rival contentions have been heard and record perused. During the course of assessment the AO held that assessee was in default for non- deduction of tax at source u/s.194H on payment of credit card collection charges to bank. By the impugned order the CIT(A) held that assessee was not in default insofar as no tax was deductible at source in respect of commission retained by card companies, following the decision of the Tribunal in the case of Jet Airways Ltd., & 7441/Mum/2010, order dated 17-7-2013.
Ld. AR placed on record order of the Tribunal in assessee’s own case dated 13-4-2016, wherein the Tribunal held as under :-
2 “4. We have heard both the parties and perused the orders of the Revenue Authorities as well as the cited decision of the Tribunal and also the relevant material placed before us. On perusal of the said decision of the Tribunal (supra) dated 1.5.2015, we find, on identical issue, the Tribunal dismissed the Revenue‟s appeal and upheld the decision of the CIT (A) vide para 2.1 of its order. Considering the significance of the said para 2.1 of the Tribunal‟s order (supra) and for the sake of completeness of this order, the same is extracted as under: “2.1. We have considered the submissions of Ld DR and perused the material available on record. The facts, in brief are that the assessee is in the business of retails in electronic goods, kitchen appliances, computers, laptops and related accessories through dedicated outlets called “Croma”. The assessee declared loss of Rs. 85,33,61,594/- in its return filed on 29.9.2009. The Ld AO during the assessment proceedings asked the assessee to show cause as to why the payments of charges to banks in respect of sales effected through card mechanism should not be subjected to TDS u/s 194H of the Act. The assessee vide communication dated 15.12.2011 explained that the provisions of section 194H of the Act will be attracted only when one person acts on behalf of another, thereby, creating a principle and agent relationship and further in the instant case, the sale is conducted by the assessee on its own and not through the bank and further the transaction may termed as credit card MSF charges but in charges, cheque book request charges, etc. The Ld AO completed the assessment disallowing the expenditure of Rs. 5,02,36,000/- incurred on account of payment of processing charges to HDFC bank on total amount swiped through customer credit card and expenditure of Rs. 49,02,000/- on account of various other bank charges (Cash Management Services) u/s 40(a)(ia) of the Act. According to the Ld AO, tax should have been deducted at source u/s 194 of the Act. On appeal, Ld CIT (A) examined the facts and following the decision in the case of Ahmedabad Stamp Vendors Association vs. UOI (257 ITR 202) and Tata Tele Services Ltd vs. DCIT (TDS) a decision from Bangalore Bench (ITA Nos.308 to 310 and 393 to 396) order dated 27/11/2012, wherein, it was held that there is no requirement of making TDS on the commission retained by Card Companies, opined that the provisions of section 40(a)(ia) r.w.s 194H of the Act are not applicable, deleted the addition. We find no infirmity in the conclusion of the Ld CIT (A) under the facts available on record. His stand is affirmed. Finally, the appeal of the Revenue is dismissed.”
Considering the above settled nature of the issue and also respectfully following the decision of the Tribunal for the AY 2009- 2011 and also following the principles of consistency, we are of the opinion, the decision taken by the CIT (A) is fair and reasonable and it does not call for any interference. Accordingly, grounds raised by the Revenue are dismissed.”