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2016 (7) TMI 18 - ITAT MUMBAI

2016 (7) TMI 18 - ITAT MUMBAI - TMI - TDS u/s 194H - TDS liability on charges paid by the assessee to the bank for using credit card facilities - Held that:- No TDS liability in respect of payments made to banks for using credit card swiping machines. See The Commissioner of Income Tax-II Versus JDS Apparels Private Limited [2014 (11) TMI 732 - DELHI HIGH COURT ] - Decided in favour of assessee. - I.T.A. No. 6684/Mum/2014 - Dated:- 1-6-2016 - Shri B.R. Baskaran (AM) & C.N. Prasad (JM) For Th .....

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ing credit card facilities. Learned CIT(A) deleted the addition by following the decision rendered by the Coordinate Bench of the ITAT in the case of Jet Airways (India) Ltd. (ITA Nos. 7439, 7440 & 7441/Mum/2010 dated 17.7.2013). 3. Aggrieved, the Revenue filed this appeal before us. 4. We have heard the parties and perused the record. We have already noticed that learned CIT(A) has deleted the demand raised upon the assessee by following the decision rendered by the Tribunal. For the sake o .....

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arely covered by the decision of the Hon ble ITAT, Hyderabad in the case of Vah Magna Retail Private Limited. The relevant portion of the said judgement is reproduced hereunder; "4. We heard the Learned Departmental Representative and perused the orders of the lower authorities and other material on record Assessee is a company engaged in the business of direct retail trading in consumer goods. Assessee claimed deduction of ₹ 16,34,000 on account of commission paid to the credit card .....

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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 .....

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that even the merchant establishment conducts the transaction for the bank. The sale made on the basis of a credit card is clearly a transaction of the merchant's establishment only and the credit card company only facilitates the electronic payment, for a certain charge. The commission retained by the credit card company is therefore in the nature of normal bank charges and not in the nature of commission/brokerage for acting on behalf of the merchant establishment. Accordingly, concluding .....

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. 746/JP/2011 (AY- 2008-09) dated 2.2.2012 and the Tribunal held that the provisions of section 194H of the Act are not applicable as the banks make payments to the assessee after deducting certain fees as per the terms and conditions In the credit card and it is not a commission but a fee deducted by the banks." The said issue was again considered by the Jaipur Bench of the Tribunal in the case of Bhandari Jewellers ITA NO. 745/JP/2011(AY- 2008-09) dated 02.02.2012 wherein it was also held .....

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decided in favour of the appellant, thereby holding that the provisions of Section 194H of the Act do not apply to credit card collection charges. For ease of reference, the concluding paragraph of the above referred order dated 01.10.2013 passed by the learned CIT(A)-17, Mumbai in the appellant's case for the same assessment year i.e. A.Y . 2010-11 is reproduced hereunder; "2.3.1 I have carefully considered the submissions and contention of the Id. A.R. of the appellant and also carefu .....

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e purview of TD5. In the instant case, the facts are similar to the aforesaid case and, therefore, following the above decision, the addition made by the A. 0. is deleted Hence, the ground of appeal of the appellant is allowed" 2.3.2 Facts remaining the same as explained by the appellant, I have no reason to differ from the findings of my Id predecessor, following the order, this ground of appeal of the appellant is allowed" 5.4 Further, it is significant to mention here that similar i .....

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