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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI D. KARUNAKARA RAO & SHRI AMARJIT SINGH
सुनवाई की तायीख / Date of Hearing : 30.11.2015 घोषणा की तायीख /Date of Pronouncement : 28.01.2016 आदेश / O R D E R
PER D. KARUNAKARA RAO, AM:
This appeal filed by the Revenue on 30.3.2014 is against the order of the CIT (A)14, Mumbai dated 14.3.2014 for the assessment year 2011-2012.
In this appeal, assessee raised three grounds in toto. The only issue raised is this appeal relates to non-deduction of TDS u/s 194H of the Act in respect of the transactions of credit card calculation charges collected upfront from the banks. CIT (A) granted relief to the assessee relying on the order of the Tribunal in the case of Kotak Securities Limited in dated 3.2.2012. CIT (A) discussed this issue in paras 3.3 and 3.4 of his order before granting relief to the assessee. For the sake of completeness of this order the said paras from the CIT (A)‟s order are extracted as under:- “3.3. I have perused the facts of the case, submissions of the appellant and the order u/s 201(1)/201(1A) and the order of the Hon‟ble ITAT in the case of M/s. Kotak Securities Ltd in ITA No.6657/Mum/2011, dated 3.2.2012 for the AY 2004-05 wherein the Hon‟ble ITAT has held as under:
“In the case before us, there is no principle agent relationship between the bank issued the bank guarantee and the assessee. When bank issues the bank guarantee, on behalf of the assessee, all it does is to accept the commitment of making payment of a specified amount to, on demand, the beneficiary and it is in consideration of this commitment, the bank charges a fees which is customarily termed as „Bank Guarantee Commission‟ . While it is termed as “guarantee commission” it is not the nature of „commission‟ as it is understood in common business parlance and in the context of the section 194H. This transaction, in our considered view, is not a transaction between principle and agent so as to attract the tax deduction requ9irements u/s 194H. We are, therefore, of the considered view that the CIT (A) indeed erred in holding that the assessee was indeed under obligation to deduct tax at source u/s 194H from payments made by the assessee to various banks. As we have held that the assessee was not required to deduct tax at source u/s 194H, the question of levy of interest u/s 201(1A) cannot arise. In view of the above discussion, we quash the impugned demands u/s 201(1) and 201(1A) r.w.s 194H. We, therefore, also see no need to deal with other peripheral legal issue raised by the assessee.”
After hearing both the parties and considering the above conclusions of the CIT (A), who relied heavily on the coordinate Bench decision of the Tribunal in the case of Kotak Securities Ltd (supra), we are of the opinion that the order of the CIT (A) is fair and reasonable and it does not call for any interference. Further, we also agree with the Ld Counsel‟s argument that such payments being payments between the principal to principal, the TDS provisions need not be invoked. Accordingly, all the grounds raised
by the Revenue are dismissed.
4. In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 28th January, 2016. Sd/- Sd/- (AMARJIT SINGH) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 28.1.2016 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. 2. प्रत्मथी / The Respondent. 3. आमकय आमुक्त(अऩीर) / The CIT(A)- आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR,
5. ITAT, Mumbai