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TMI Blog2015 (6) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 27,65,565. The aforesaid sum was shown in the books of account of assessee as credit card commission. 3. The assessee is in the business of manufacture and wholesale dealing of pure silk sarees. When the customer purchases sarees using credit card, the bank after retaining their charges, remit the remaining sum to the assessee. The difference between the sale value of the sarees and the amount remitted by the bankers of Rs. 27,65,565, according to the Revenue, was nothing but commission and therefore the assessee ought to have deducted tax at source on the said sum u/s. 194H of the Act. 4. The plea of the assessee before the Assessing Officer was that bankers only facilitate electronic payments for certain purchases and such charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot being an individual or a Hindu undivided family, who is responsible for paying, on or after the 1st day of October, 1991 but before the 1st day of June, 1992, to a resident, any income by way of commission (not being insurance commission referred to in section 194D) or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of ten per cent. (2) The provisions of sub-section (1) shall not apply - (a) To such persons or class or classes of persons as the Central Government may, having regard to the extent of inconvenience caused or likely t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- "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 Rs. 16,34,000 on account of commission paid to the credit card companies, which has been disallowed by the assessing officer in terms of S.40(a)(ia) on account of the failure of the assessee to deduct tax at source in terms of S.194H of the Act, while making the said commission payments. It was the contention of the assessee before the lower authorities that the assessee only receives the payment form the bank/credit card companies concerned, after deduction of commission thereon, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for making TDS on the 'Commission retained by the credit card companies, the disallowance of Rs. 16,34,000 is deleted.....' We find no infirmity in the above reasoning given by the CIT(A). We accordingly uphold the order of the CIT(A) and reject the grounds of the Revenue which are devoid of merit." 11. Similar view has been expressed by several Bench of ITAT in the following cases: 1. M/S.TATA Teleservices Ltd. Vs. DCIT ITA No.393-396/Bang/11 order dated 27.11.2012 2. ITO (TDS) Vs. M/S.Jet Airways ITA No.7439-41/Mum/2010 order dated 17.7.2013, 3. M/S.Gems Paradise Vs. ACIT ITA No. 746/JP/2011 order dated 2.2.2012. 12. In light of the aforesaid decisions, we are of the view that payments to banks on account of utilization of credit c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2,44,18,648, out of which Rs. 6,96,923 was commission paid to auto and taxi drivers. As already seen the Assessee is in the business of selling silk saree. The assessee's explanation was that auto & taxi drivers who bring potential customers/clients are paid commission in cash. The AO wanted the names and addresses of drivers who were paid such commission. The assessee could not produce the details and also the details of even the taxi and name of drivers was not maintained by them. There were, however, cash vouchers evidencing payment of commission. According to AO, it was not possible to verify the payments made by the assessee nor was tax deduction at source done by the assessee on the aforesaid payments, on the pretext that individua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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