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TMI Blog2024 (12) TMI 1331X X X X Extracts X X X X X X X X Extracts X X X X ..... of an agent and principal relationship. This is the exact purport and the rationale behind the provision. The e-commerce platform in question is not concerned with buying or selling of goods. It is not bothered or concerned with the quality, price, nature, quantum, etc. of the goods bought/sold. The aforesaid principles and interpretations can apply to taxing statutes. In the present case, the said principle should be applied as ecommerce platform would necessarily have acted as per law and it is not the case of the revenue that the e-commerce platform had not paid taxes on their income. It is not a case of loss of revenue as such or a case where the recipient did not pay their taxes. Considering the additional evidence furnished by the assessee in compliance with section 201 of the Act, we allow the ground raised by the assessee. - Dr. S. Seethalakshmi, Judicial Member And Shri Gagan Goyal, Accountant Member For the Appellant : Mr. Rajeev Sogani, CA, Ld. AR For the Respondent : Mr. Gautam Singh Choudhary, JCIT, Ld. DR ORDER PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of NFAC, Delhi dated 20.08.2024 passed u/s. 250 of the Income Tax Act, 1961 (in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other charges release the remaining amount to the assessee s account. 4. Considering the facts of the case, we deem it fit to discuss the bare provisions of sections 40(a) (ia) and 194H of the Act as under: Amounts not deductible. 40. Notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head Profits and gains of business or profession , (a) in the case of any assessee (ia) thirty per cent of any sum payable to a resident, on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid on or before the due date specified in subsection (1) of section 139 : Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139,thirty per cent of such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid :] Provided further that where an assessee fails to deduct the whole or any part of the tax in accordance with the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on any commission or brokerage payable by Bharat Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited to their public call office franchisees. Explanation. for the purposes of this section, (i) commission or brokerage includes any payment received or receivable, directly or indirectly, by a person acting on behalf of another person for services rendered (not being professional services) or for any services in the course of buying or selling of goods or in relation to any transaction relating to any asset, valuable article or thing, not being securities; (ii) the expression professional services means services rendered by a person in the course of carrying on a legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or such other profession as is notified by the Board for the purposes of section 44AA; (iii) the expression securities shall have the meaning assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (iv) where any income is credited to any account, whether called Suspense account or by any other name, in the books of account of the pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee. In the process, a small fee was deducted by the acquiring bank, i.e. said bank, whose swiping machine was used. On swiping the credit card on the swiping machine, the customer whose credit card was used, got access to the internet gateway of the acquiring bank resulting in the realization of payment. Subsequently, the acquiring bank realized and recovered the payment from the bank which had issued the credit card. 'H' had not undertaken any act on behalf of the assessee. The relationship between 'H' and the assessee was not of an agency but that of two independent parties on principal to principal basis. 'H' was also acting and equally protecting the interest of the customer whose credit card was used in the swiping machines. It is noticeable that the bank in question or their employees were not present at the spot and were not associated with buying or selling of goods as such. Upon swiping the card, the bank made payment of the bill amount to the assessee. Thus, the assessee received the sale consideration. In turn, the bank in question had to collect the amount from the bankers of the credit card holder. The bank had taken the risk and also remai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... saying the assessee to do an impossible task, in the guise of section 194H of the Act, which he is not able to. Section 194H of the Act would not be attracted in present case, as e-commerce was not acting as an agent of the assessee. Once the payment was made by the customer, it was received and credited to the account of the assessee. In the process, a small fee was deducted by the e-commerce platform, whose platform was used. The relationship between e-commerce platform and the assessee was not of an agency but that of two independent parties on principal to principal basis. 7. The amount retained by the e-commerce a fee charged by them for having rendered the e-commerce services and cannot be treated as a commission or brokerage paid in course of use of any services by a person acting on behalf of another for buying or selling of goods. The intention of the legislature is to include and treat commission or brokerage paid when a third person interacts between the seller and the buyer as an agent and thereby renders services in the course of buying and/or selling of goods. This happens when there is a middleman or an agent who interacts on behalf of one of the parties, helps the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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