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2015 (11) TMI 583 - AT - Income TaxTDS under section 194H - whether no TDS is required to be deducted by the assessee company on the impugned payments retained by the banks/credit card agencies in respect of Hotel bookings through credit card - applicability of section 40(a)(ia) - CIT(A) delted the disallowance - Held that:- The issue is no longer res-integra and is squarely covered in favour of the assessee by the decision of the Hon’ble Delhi High Court in the case of JDS Apparels Private Limited (2014 (11) TMI 732 - DELHI HIGH COURT) and in the case of Jet Airways (India) Ltd. (2013 (8) TMI 586 - ITAT MUMBAI ) wherein held relationship between the bank and the assessee was not of an agency but that of two independent parties on principal to principal basis. The bank was also acting and equally protecting the interest of the customers whose credit card was used in the swiping machines. The bank was not associated with buying and selling of goods as such. The amount retained by the bank is a fee charged by them for having rendered the banking services and cannot be treated as a commission or brokerage paid in the course of use of any services by a person acting on behalf of another for buying or selling of goods. The banking services cannot be covered and treated as services rendered by an agent for the principal during the course of buying or selling of goods as the banker does not render any service in the nature of agency. Accordingly, section 40(a)(ia) of the Act was held to be not applicable on payment of “commission” to the banks on payment received from customers through credit cards. The CIT(A) has succinctly analyzed the facts of the case and has arrived at the conclusion in accordance with law and therefore no interference is called for. Thus, the ground of appeal raised by the Revenue is dismissed. - Decided in favour of assessee.
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