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TMI Blog2015 (11) TMI 1880X X X X Extracts X X X X X X X X Extracts X X X X ..... as improved functioning of its hotel. Assessee, if it had not covered the drain with the slabs would have been consistently pestered by its guests complaining of bad smell and mosquito menace. In our opinion, though it was a one-time outgo, it did not bring into existence any new profit making apparatus. It simply improved the functioning efficiency of the assessee. When the facts are considered in totality we cannot but agree with the view taken by the CIT (A). Ground 2 of the Revenue stands dismissed TDS u/s 194H - credit card commission - assessee had paid to the bank for credit / debit card payment realisation - AO was of the opinion that such payments fell within the ambit of commission and therefore Section 194H of the Act stood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it has raised four grounds of which grounds 1 and 4 are general needing no adjudication. 02. Vide its ground 2 Revenue is aggrieved that CIT (A) allowed a claim of expenditure for covering storm water drain. 03. Facts apropos are that assessee engaged in running hotels had filed its return of income for the impugned assessment year declaring total income of Rs.8,42,64,776/-. During the course of assessment proceedings it was noted by the AO that assessee had a business expenditure of Rs.2,24,70,345/- towards covering of open drainages near its hotel premises. Submission of the assessee was that the drainage was running along a common area belonging to BBMP. As per the assessee, open drainage was over-flowing with sewage water result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... just because the outgo was a one-time expenditure would not mean that it was a capital outgo. Relying on the judgment of Hon ble Apex Court in the case of CIT v. Associated Cement Companies Ltd [(1988) 172 ITR 257], CIT (A) held that assessee had not augmented its capital structure through the outgo. As per the Ld. CIT (A) no income earning apparatus was created. Further he also noted that assessee could never use it for its own business operations. He held the expenditure to be a revenue out go and deleted the disallowance. 06. Now before us, Ld. DR strongly assailing the order of CIT (A) submitted that laying of slabs on drainage running through the property of the assessee did bring enduring benefits to the assessee. Even if no capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made by the AO on credit card commission. 10. Facts apropos are that assessee had paid Rs.1,46,36,138/- to the bank for credit / debit card payment realisation. AO was of the opinion that such payments fell within the ambit of commission and therefore Section 194H of the Act stood attracted. As per the AO, relationship between the bank and the merchant was established under the merchant contract and hence contention of the assessee that bank was acting on behalf of card holder was incorrect. AO also noted that CBDT vide Notification No.56/2012, dt.13.12.2012 exempted seven services from the rigors of deduction of tax at source with effect from 01.01.2013 and hence according to the AO, prior to that date, such payments fell within secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... automatically stood attracted. 13. We have perused the orders and heard the contentions of the Ld. DR. Grounds raised by the Revenue relies on CBDT notification No.56/2012, dt.31.12.2012 which exempts certain types of payment from deduction of tax at source. Said notification has been issued under powers vested on the central government vide Section 197A(1D) of the Act. Nodoubt one of the type of payments mentioned in the above circular is credit card/ debit card commission on transactions between merchant establishment and acquirer bank. Notification was effective from 01.01.2013. But in our opinion this notification cannot be construed in a manner to say that prior to 01.01.2013 charges deducted by the bank from credit card payments r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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