TMI Blog2015 (12) TMI 1503X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the bank. There is no such relation between the bank and the shop keeper, which establishes the relationship of a principal and commission agent. Therefore, TDS is not liable to be deducted on payment made on the basis of credit card. The other case laws referred by the assessee is also squarely applicable. - Decided in favour of assessee. Disallowance of Misc. supply expenses - CIT(A) deleted the addition - Held that:- The assessee is a Five Star hotel managed professionally. There is an agreement with multinational company in sharing receipts. The ld Assessing Officer made addition by making general observation. He is not deducted any specific bill vouchers that the assessee has made cash payments for expenses or made self made vouchers. The ld DR had not controverted the findings given by the ld CIT(A), therefore, we uphold the order of the ld CIT(A).- Decided in favour of assessee. - ITA No. 1026/JP/2013 - - - Dated:- 10-11-2015 - SHRI R.P. TOLANI, JM SHRI T.R. MEENA, AM For The Revenue : Shri Kailash Mangal (JCIT) For The Assessee : Shri G.G. Mundra (CA) ORDER PER: T.R. MEENA, A.M. This is an appeal filed by the revenue against the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent rates of depreciation have been provided by the law. As per Appendix-I, Rule 5 of the Act, the depreciation on wind mills is as under:- Clause III: Machinery Plant (xiii) Renewal energy saving devices being: (I) Wind Mills and any specially designed devices which run on wind mills. (M) Any special device including electric generators and pumps running on wind energy. The categorization made in the Appendix shows that there is no intention to include internal approach roads, foundation work and crane platform for wind mill, supply of electric items like RSJ Poles Disc insulator, conductor etc. in the above block of assets. Further the expenditure on account of labour for civil work or electrical work carried out in connection with the installation of wind mill also cannot be included in the definition of Wind Mill by any means because they are not devices in any sense are mentioned in (xiii)(L) and (m). The ld Assessing Officer recategorized the assets shown by the assessee in the balance sheet under the following heads: 1] Expenditure incurred for civil work carried out at site, charges for creation of foundation/platform. 2] Expenditure incurred on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned CIT(A), who had allowed the appeal by observing as under:- 4. I have considered submissions of the appellant. It is noticed that the A.O. disallowed the claim of depreciation on the ground that the depreciation on the building and plant and machinery meant for wind mill was not entitled to depreciation @ 80%. The A.O. also disallowed depreciation on leasehold land. 4.1 It is further noted that the depreciation on wind mill was disallowed in earlier years also. In the A.Y. 2008-09 the relief was granted by my predecessor on the basis of the decision of the Hon ble ITAT in the case of M/s Chirash Associates Pvt. Ltd. (ITA No. 1632/JP/08). It is further noted that the appeal on this ground was allowed by my predecessor in A.Y. 2010-11 as well. Therefore, following the order of my predecessor as well as of the Hon ble ITAT, the disallowance made by the A.O. is deleted. The appeal on this ground is, accordingly, allowed. 4. Now the revenue is in appeal before us. The Ld. DR vehemently supported the order of the ld. Assessing Officer. At the outset, the ld AR of the assessee has supported the order of the ld CIT(A) and further submitted that this issue has already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 4,82,093/- U/s 40(a)(ia) of the Act. The ld Assessing Officer observed that the assessee had debited credit card commission of ₹ 8,67,719/-. The assessee has not deducted TDS on payment of credit card service charges. Each charges appeared to be commission in respect of credit card. Section 40(a)(ia) of the Act is squarely applicable on it. The assessee was given reasonable opportunity of being heard. The assessee s reply was reproduced by the Assessing Officer on page 15 to 17 of the assessment order. After considering the assessee s reply, the ld Assessing Officer held that actually credit card commission payment is services charges. The ld Assessing Officer also analysed the credit care facility services on page 17 to 19 of the assessment order and finally held that service charges/credit card commission is nothing but commission is defined in Section 194H, which has also reproduced by the Assessing Officer on page 20 and 21 of the assessment order. Accordingly, the assessee is liable to deduct TDS U/s 194H of the Act. He further referred CBDT circular No. 619 on TDS dated 04/12/1991 on page No. 22 of the assessment order. He further relied on the decision in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ITAT, Jaipur Bench as well as from appeal order of ITAT in case of assessee for A.Y. 2008-09. The judgments of other Benches of ITAT also supports this legal position which are (i) Tata Tele services Vs. DCIT 140 ITD 451 (Bang.) (ii) DCIT Vs Vah Magna Retail P Ltd. ITA No. 905/Hyd 2011 (Hyd). (iii) ACIT Vs Jet Airways Ltd. (2014) 146 ITD 682 (Bom) (iv) Marudhar Hotels P Ltd. Vs. JCIT (2013) 156 TTJ 729 (Jod). 9. We have heard the rival contentions of both the parties and perused the material available on the record. This issue has been considered by the Coordinate Bench in Gem Paradise Vs. ACIT in ITA No. 746/JP/2011 in which it has been held that the assessee sold its goods through credit card and on presentation of bill issued against credit card, the bank makes payment to the assessee after deducting agreed fees as per terms and conditions in case of credit card. This is not a commission payment but a fees deducted by the bank. There is no such relation between the bank and the shop keeper, which establishes the relationship of a principal and commission agent. Therefore, TDS is not liable to be deducted on payment made on the basis of credit card ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h petty expenses for which external vouchers are not available and such vouchers are also signed by store keeper and countersigned by senior management staff. The company has internal audit system as well as there is statutory audit and in audit reports nothing adverse has been pointed by the auditor. The ld Assessing Officer also had not made any specific remark but made a general remark. In A.Y. 2008-09, 2006-07 and in A.Y. 2005-06 such disallowance was made by the Assessing Officer. The ld CIT(A) deleted in toto in all the years. Therefore, he argued to confirm the order of the ld CIT(A). 13. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee is a Five Star hotel managed professionally. There is an agreement with multinational company in sharing receipts. The ld Assessing Officer made addition by making general observation. He is not deducted any specific bill vouchers that the assessee has made cash payments for expenses or made self made vouchers. The ld DR had not controverted the findings given by the ld CIT(A), therefore, we uphold the order of the ld CIT(A). 14. In the result, the revenue s appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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