TMI Blog2015 (8) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... payments to banks for utilization of credit card facilities are in the nature of bank charges and not commission and, therefore, no tax is deductible at source u/s 194H. No decision to the contrary has been brought to our notice by the department. Now, once no tax is deductible at source u/s 194H of the Act on the payment made to bank for utilization of credit card facility and such payment is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of ₹ 44,65,654/- made by the Assessing Officer u/s 40(a)(ia). 2. The assessee is engaged in the business of trading of readymade garments. For the year under consideration, the Assessing Officer disallowed payment of ₹ 44,65,654/- made by the assessee to HDFC Bank towards credit card commission/discount, on which, TDS, though deductible as per Section 194H of the Act, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through credit cards rests with the acquiring bank only; and that as such, the transaction between retail merchants and the credit card acquiring bank is on a principal-to-principal basis. The ld. Counsel for the assessee has placed reliance on Income-tax Officer (TDS)-2(1) vs. Jet Airways (India) Ltd. , 36 taxmann.com 379 (Mumbai-Trib); Order dated 10.04.2012 passed by the Hyderabad Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces for the recovery of the bill amount to the assessee; that this shows that the bank was acting as an agent of the assessee for the purposes of recovery of payment, for which, it was being paid commission/discount; that since the relationship between the assessee and the bank was that of a principal and agent, for which, commission/discount was deducted obviously, TDS was liable to be deducted o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances that payments to banks for utilization of credit card facilities are in the nature of bank charges and not commission and, therefore, no tax is deductible at source u/s 194H. No decision to the contrary has been brought to our notice by the department. Now, once no tax is deductible at source u/s 194H of the Act on the payment made to bank for utilization of credit card facility and such p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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