TaxTMI 
TaxTMI 
2022 (6) TMI 885
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....-14. 2. The grounds of appeal raised by the assessee reads as under: "1. On the facts and circumstances of the commissioner (Appeals) is wrong in disallowing a sum if Rs. 20,83,340/- on account of Credit card commission under section 40(a)(ia) of the Income Tax Act. a) The Commissioner (Appeals) is wrong in treating Commissioner charged by credit card Company under section 194H of the Income Tax Act. 2. The Commissioner (Appeals) is wrong in disallowing Rs. 83,787/- on account of staff recruitment expenses. a) The Commissioner (Appeals) has failed to take into account that even after including commission of employees for referral for their salary below the taxable limit. 3. The Commissioner (Appeals) is wrong in disallowing a sum....
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....ssee to deduct tax at source arises only when a person acts on behalf of other person. In the present case, the commission is unilaterally retained by the credit card company. It cannot be said that bank acts on behalf of the merchant establishment or that merchant establishment conducts the transaction for the bank. The sale made on the basis of credit card is merely a transaction by the merchant establishment and the credit card company only facilitates the electronic payment for a certain charge. The commission retained by the credit card company is therefore akin to normal bank charges and not in the nature of commission/brokerage on behalf of the merchant establishment as envisaged under Section 194H of the Act. The assessee thus conte....
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....d 09.12.2016 wherein Assessing Officer did not dispute the position taken by the assessee for non deduction of TDS payment of service charges to banks situated in India such as HDFC Bank etc. (except for the credit/debit card charges pertaining to American Express Bank). 6.2. On behalf of the Revenue, it was contended that TDS is applicable on charges attributable to foreign banks in view of the press release dated 04.01.2013 issued by Government of India for allowability of payment without TDS of credit/debit card commission on transactions between merchant establishment and acquirer banks. 6.3. In view of the judgment in the case JDS Apparels Pvt. Ltd. (supra), the artificial distinction between charges attributable to foreign banks (Am....