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2016 (10) TMI 804 - AT - Income TaxTDS u/s 194H - Commission - whether the charges deducted by the bank for use of swiping machines for sales through credit card is commission or not - Held that:- credit card charges are nothing but charges charged on principal to principal basis for the reason that bank accepts the commitment of making all credit card payments after deducting its own charges, which are related to this commitment and does not fall u/s 194H of the Act in term of “commission”. We are of the view that the provisions of section 194H of the Act are applicable in those cases where element of agency is present. But, in the present case, there is no such element of agency between the assessee and the bank. The above payments represent the charges paid to the bank for facilitating the payments by the customers. This is the modern and easiest way of doing business, which has been internationally accepted all over the world. Since there is no existence of agency, we are of the view that the provisions of section 194H of the Act cannot be applied to the assessee. Decision in the case of ITO–TDS Vs. Jet Air Ways (India) Ltd. [2013 (8) TMI 586 - ITAT MUMBAI] followed - Decided in favor of assessee.
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