TMI Blog2015 (6) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... een the sale value of the sarees and the amount remitted by the bankers according to the Revenue, was nothing but commission and therefore the assessee ought to have deducted tax at source on the said sum u/s. 194H - CIT(A) deleted liability to tds - Held that:- CIT(Appeals) had rightly held that disallowance made by the AO was not warranted. The fact that such commission payments are routine in the line of business of assessee is not disputed by the AO. The genuineness of the payment has also not been doubted by the AO. There is no material on record to show that the amounts paid to individual taxi & auto drivers were above the threshold limit for deduction of tax at source. It is not the case of the AO that individual vouchers evidencing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer was that bankers only facilitate electronic payments for certain purchases and such charges are normal bank charges and not in the nature of commission falling with the ambit of section 194H of the Act. The assessee relied on the decision of the following decisions:- (1) DCIT v. Vah Magna Retail Pvt. Ltd., 4T(II) ITCL 537 (Hyd). (2) Gems Paradise, ITA No.746 841/Jp/2011 dated 2.2.12. 5. The assessee also submitted that services rendered by the bank are on a principal to principal basis and for characterizing the payment of commission, there should be a relationship of principal and agent between the payer and the recipient. 6. The AO did not accept the claim of assessee. He held that the bank was acting as an agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... class or classes of persons as the Central Government may, having regard to the extent of inconvenience caused or likely to be caused to them and being satisfied that it will not be prejudicial to the interests of the revenue, by notification in the Official Gazette , specify in this behalf; (b) Where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person referred to in sub-section (1) to the account of, or to, the payee, does not exceed two thousand five hundred rupees. Explanation : For the purposes of this section, - (i) Commission or brokerage includes any payment received or receivable, directly o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee only receives the payment form the bank/credit card companies concerned, after deduction of commission thereon, and thus, this is only in the nature of a post facto accounting and does not involve any payment or crediting of the account of the banks or any other account before such payment by the assessee. Considering these submission of the assessee, the CIT(A) accepted the claim of the assessee for deduction of the amount of ₹ 16,34,000 on the following reasoning- 9.8 On going through the nature of transactions, I find considerable merit in the contention of the appellant that commission paid to the credit card companies cannot be considered as falling within the purview of S.194H. Even though the definition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /JP/2011 order dated 2.2.2012. 12. In light of the aforesaid decisions, we are of the view that payments to banks on account of utilization of credit card facilities would be in the nature of bank charge and not in the nature of commission within the meaning of sec.194H of the Act. The same cannot also be said to be in the nature of professional services as services rendered by Banks is neither a service specified in the section nor notified. The CBDT by notification u/s.197A of the Act vide notification NO.56/2012 dated 31.12.2012 specified that credit/debit card commission for transaction between the merchant establishment and acquirer bank need not be subject to TDS. The revenue has argued before us that before the said notification s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not possible to verify the payments made by the assessee nor was tax deduction at source done by the assessee on the aforesaid payments, on the pretext that individual payments were less than the monetary limits for making tax deduction at source. According to the AO, genuineness of these expenses was not proved and therefore he disallowed the claim of assessee for deduction. 16. On appeal by the assessee, the CIT(Appeals) held as under:- I have carefully considered this issue. It is pointed by the AO in the assessment order that the total commission payments made during the year was an amount of ₹ 2,44,80,648/-. Thus the amount of ₹ 6,96,923/- is approximately 3% of the total commission payment. There is no conclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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