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2019 (7) TMI 866 - AT - Income TaxTDS u/s 194H - payments made towards credit card charges - non deduction of TDS - HELD THAT:- We decide this issue in favour of the assessee by confirming the appellate order passed by CIT(A) by Respectfully following the decision of the Mumbai-tribunal in assessee’s own case [2017 (5) TMI 1558 - ITAT MUMBAI] and holds that no income-tax was required to be deducted at source u/s 194H on credit card charges paid by assessee to Banks on payments received from customers on purchases made through credit card. Addition u/s 40(a)(ia) - non deduction of TDS on payments made by assessee to Banks towards cash pick up charges - HELD THAT:- We have observed that Central Government has issued notification no. 56/2012 dated 31.12.2012 (F.No. 275/53/2012-IT(B)), wherein cash management services charges are also covered as an exemption from deduction ofTDS under Chapter XVII of the 1961 Act in case such payments are made by a person to a bank listed in Second Schedule to the RBI Act, 1934, excluding a foreign bank. The aforesaid notification issued on 31-12-2012 by Central Government was later superseded by another notification issued on 17.06.2016. We have elaborately discussed these notifications in preceding para’s of this order while adjudicating disallowance of credit card charges. We are of the view that charges for cash pick up ( or also called as cash management services) paid by assessee to Banks are analogous to credit card charges so far as requirements of Chapter XVII-B of the 1961 Act is concerned. We have adjudicated in preceding para’s of this order issue of allowability of credit card charges on which no income-tax was deducted at source under Chapter XVII-B of the 1961 Act. Our decision while adjudicating disallowance of credit card charges in preceding para’s of this order shall apply mutatis mutandis to the disallowance of charges for cash pick up facility( or also called as cash management services) paid by assessee to banks for availing these services. Thus this issue being covered by ground no. ix raised by Revenue in its appeal filed with tribunal is effectively decided in favour of the assessee. The Revenue fails on this ground Disallowance of expenses u/s 14A r.w.r. 8D - HELD THAT:- No additions by way of disallowance of expenses incurred in relation to earning of an exempt income are warranted u/s 14A read with Rule 8D(2)(iii) of the 1961 Act as assessee has admittedly not earned any exempt income during the year under consideration and hence we order deletion of additions as were made by the AO u/s. 14A of the 1961 Act read with Rule 8D(2)(iii) of the 1962 Rules and uphold the appellate order passed by learned CIT(A) on this issue for reasons cited by us in this order.
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