2018 (6) TMI 1533 - AT - Income Tax

TDS u/s 194H - non deduction of tds on credit card commission expenses by bank - Held that - Following this Tribunal in the case of Trident Automobiles (P.) Ltd., (2015 (7) TMI 406 - ITAT BANGALORE) and M/s. Mysore Saree Udyog Pvt. Ltd. (2015 (6) TMI 62 - ITAT BANGALORE) we uphold the order of the ld. CIT(A) in holding that payments on account of credit card charges deducted by Banks are not in the nature of commission and therefore no deduction of tax at source thereon is warranted, as the provisions of sec. 194H of the Act are not applicable or attracted in the matter. - Decided in favour of assessee

Summary

Issues involved:
1. Disallowance under section 40(a)(ia) of the Income Tax Act in relation to credit card commission charges.
2. Justification of disallowance under section 40(a)(ia) in light of section 194H and notification number 56/2012.
3. Reliance on a previous Tribunal order for a similar issue in a different assessment year.

Detailed Analysis:
1. The appeal before the Appellate Tribunal ITAT Bangalore concerned the disallowance under section 40(a)(ia) of the Income Tax Act related to credit card commission charges amounting to ?56,29,043 for the Assessment Year 2013-14. The dispute revolved around the non-deduction of TDS under section 194H of the IT Act. The Tribunal noted that a similar issue had arisen in the Assessment Year 2011-12, where the matter was decided in favor of the assessee by the CIT(A), leading to an appeal by the revenue. The Tribunal referred to para 3.2 of the previous Tribunal order, highlighting the revenue's contention that disallowance under section 40(a)(ia) was warranted. However, the Tribunal found the issue to be identical to the previous year and relevant, ultimately deciding the matter in favor of the assessee based on the previous Tribunal order's decision.

2. One of the grounds raised by the revenue was the justification of disallowance under section 40(a)(ia) concerning credit card commission charges in light of section 194H and notification number 56/2012. The Tribunal observed that in the previous Tribunal order, it was held that payments for credit card charges deducted by banks were not in the nature of commission, and therefore, no TDS deduction was required under section 194H. The Tribunal referenced decisions from other Tribunal cases to support this conclusion. The revenue failed to provide any contrary decision from a High Court or point out any factual differences between the present year and the previous assessment year. Consequently, the Tribunal upheld the decision in favor of the assessee based on the earlier Tribunal order and dismissed the appeal filed by the revenue.

3. The Tribunal also considered the reliance on a previous Tribunal order for a similar issue in a different assessment year. It was noted that the previous Tribunal order had followed decisions from other Tribunal cases to support the conclusion that credit card charges deducted by banks did not fall under the purview of section 194H. As no contradictory decisions were presented by the revenue, and no factual variances were highlighted, the Tribunal decided to follow the precedent set by the earlier order and ruled in favor of the assessee, ultimately dismissing the revenue's appeal.

In conclusion, the Appellate Tribunal ITAT Bangalore upheld the decision in favor of the assessee regarding the disallowance under section 40(a)(ia) in relation to credit card commission charges for the Assessment Year 2013-14, based on the precedent set by a previous Tribunal order for a similar issue in a different assessment year.