2016 (2) TMI 1300

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..... thin the meaning of section 194H. In view of the aforesaid Judgment of Hon ble Delhi High Court in the case of JDS Apparels P. Ltd.[ 2014 (11) TMI 732 - DELHI HIGH COURT] we hereby affirm the conclusion of the CIT(A) to the effect that the impugned disallowance made by the AO by invoking section 40(a)(ia) is unsustainable. - Decided in favour of assessee.
S/Sh. Rajendra & Ram Lal Negi, JJ. Assessee by : Shri Prakash Jotwani Revenue by : Shri B D Naik ORDER RAJENDRA, J. Assess-company, engaged in the business of running of five star deluxe hotels, filed its return of income on 28. 09.2011,declaring income of Rs.(-)1,37,20,956/-.The Assessing Officer(AO) completed the assessment, u/s.143(3)of the Act, on 07.10.2014,determining the inc .....

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..... ebit cards were processed by the banks. In consideration of the banks agreeing to render such payment processing services, assessee was paying commission to various banks which was in the nature of 'bank charges; and such expenditure could not be considered as 'commission' so as to fall within the provisions of section 194H of the Act. However, the Assessing Officer disagreed with assessee, as according to him, the banks were charging commission on providing credit card services to the assessee and such commission payments were liable for deduction of tax at source u/s 194H of the Act, and, Since the assessee did not deduct the requisite tax at source, the corresponding expenditure of ₹ 6,34,22,030/- was disallowed in term .....

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..... nt of the assessee while processing the credit card payments and a charge collected by the bank for such service does not amount to 'commission' within the meaning of section 194H of the Act. In view of the aforesaid Judgment of Hon'ble Delhi High Court in the case of JDS Apparels P. Ltd. (supra), we hereby affirm the conclusion of the CIT(A) to the effect that the impugned disallowance made by the Assessing Officer by invoking section 40(a)(ia) is unsustainable. Thus, Revenue fails on this Ground also" 4.1 Following the aforesaid precedent, which has been rendered in identical circumstances, the impugned order of CIT(A) on the aforesaid aspect is hereby affirmed and accordingly the Revenue fails." Respectfully followi .....

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