Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore V. M/s Velankani Information Systems Pvt Ltd , Bangalore

ITA 1650/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4646 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 07-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Assessee Lawyers: SUDHIR PRABHU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 165 0 / BANG/201 7 ASSESSMENT YEAR : 20 1 3 - 1 4 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7 (1) (2), BANGALORE. VS. M/S. VELANKANI INFORMATION SYSTEMS PVT. LTD., ELECTRONIC CITY, BANGALORE 560 100. PAN: AABCV0552G APPELLANT RESPONDENT APPELLANT BY : SMT. PADMA MEENAKSHI, JCIT (DR) RESPONDENT BY : SHRI SUDHIR PRABHU, CA DATE OF HEARING : 30 .05.2018 DATE OF PRONOUNCEMENT : 08 .0 6 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE WHICH IS DIRECT ED AGAINST THE ORDER OF LD. CIT(A)-7, BANGALORE DATED 31.05.2017 FOR ASSESS MENT YEAR 2013-14. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT(A) IS OPPOSED TO LA W AND FACTS OF THE CASE. 2. 'WHETHER ON THE FACTS AND CIRCUMSTANCESOF THE CA SE THE CIT(A) IS JUSTIFIED IN LOW IN HOLDING THAT CREDIT CARD COMMIS SION CHARGE DEDUCTED BY BANKS ARE NOT COVERED UNDER TDS U/S.194H AND HEN CE DISALLOWANCE U/S.40(A)(IA) IS NOT APPLICABLE, WHEREAS THE NOTIFI CATION NUMBER 56/2012 DATED 31.12.2012 ISSUED BY THE CBOT COMES INTO FORC E FROM 01.01.2013 THE INSTANT CASE RELATES TO PRIOR PERIOD '? 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) IS ERRED IN PLACING RELIANCE ON THE DECISION OF THE HON'BLE ITAT BANGALORE BENCH IN ITA NO.308 TO 310 AND 393 TO 396 (BANG) OF 2011 AND IN DELETING THE DISALLOWANCE MADE BY THE AO U/S .40(A)(IA) SINCE THE ABOVE DECISION HAS NOT BECOME FINAL AND THE DEPARTM ENT HAS FILED FURTHER APPEAL'? 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATES ITA NO.1650/BANG/2017 PAGE 2 OF 3 TO THE ABOVE GROUNDS MAY BE REVERSED ANDTHAT OF THE ASSESSING OFFICER MAY BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 3. AT THE OUTSET, IT WAS SUBMITTED BY LD. AR OF ASS ESSEE THAT THE ISSUE INVOLVED IN PRESENT APPEAL IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12 IN ITA NO. 2046/BANG/2016 DATED 28.06.2017. HE SUBMITTED A CO PY OF THIS TRIBUNAL ORDER. HE DRAWN OUR ATTENTION TO PARA NO. 3.4.3 OF THIS TR IBUNAL ORDER. THE LD. DR OF REVENUE SUPPORTED THE ASSESSMENT ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IN THE PRESENT CASE, THE DISPUTE IS REGARDING DISALLOWANCE U/S. 40(A)(IA ) R.W.S 194H OF IT ACT IN RESPECT OF CREDIT CARD COMMISSION EXPENSES AMOUNTIN G TO RS. 56,29,043/- IN VIEW OF NON-DEDUCTION OF TDS U/S. 194H OF IT ACT. IN ASSESSMENT YEAR 2011- 12 ALSO, THE IDENTICAL ISSUE WAS INVOLVED ALTHOUGH IN THAT YEAR, THE MATTER WAS DECIDED BY CIT(A) IN FAVOUR OF THE ASSESSEE AND THE REFORE, THE APPEAL WAS FILED BY REVENUE. IN PARA 3.2 OF THIS TRIBUNAL ORDER, IT IS NOTED THAT THIS IS THE GRIEVANCE OF THE REVENUE THAT THE LD. CIT(A) WAS NO T JUSTIFIED IN HOLDING THAT DISALLOWANCE U/S. 40(A)(IA) OF THE ACT WAS NOT WARR ANTED IN RESPECT OF CREDIT CARD CHARGES DEDUCTED BY BANKS SINCE THE PROVISIONS OF SECTION 194H OF THE ACT IS APPLICABLE AS PER THE REVENUE. HENCE, WE FI ND THAT THE DISPUTE IN THE PRESENT YEAR AND ASSESSMENT YEAR 2011-12 IS IDENTIC AL AND HENCE, THIS TRIBUNAL ORDER IS RELEVANT AND THE ISSUE IN DISPUTE IN THAT YEAR WAS DECIDED AS PER PARA 3.4.3 OF THAT TRIBUNAL ORDER WHICH IS REPR ODUCED HEREINBELOW FOR READY REFERENCE. 3.4.3 FOLLOWING THE AFORESAID DECISIONS OF THE CO- ORDINATE BENCHES OF THIS TRIBUNAL IN THE CASE OF TRIDENT AUTOMOBILES (P.) LTD., (SUPRA) AND M/S. MYSORE SAREE UDYOG PVT. LTD. (SUPRA) WE UP HOLD THE ORDER OF THE LD. CIT(A) IN HOLDING THAT PAYMENTS ON ACCOU NT 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 APPLICAB LE OR ATTRACTED IN THE MATTER. 5. FROM THE ABOVE PARA REPRODUCED FROM THAT TRIBUNA L ORDER, IT IS SEEN THAT IN DECIDING THE ISSUE, THE TRIBUNAL HAS FOLLOWED VARIO US OTHER TRIBUNAL ORDERS ITA NO.1650/BANG/2017 PAGE 3 OF 3 RENDERED IN THE CASE OF ACIT (TDS) V TRIDENT AUTOMO BILES (P) LTD. IN ITA NO. 1508 TO 1510/BANG/2013 DATED 20.03.2015 AND IN THE CASE OF DCIT V MYSORE SAREE UDYOG PVT. LTD. IN ITA NO. 93/BANG/2014 DATED 27.03.2015. NO CONTRARY DECISION OF ANY HIGH COURT HAS BEEN BROUGHT ON RECO RD BY LD. DR OF REVENUE AND HE COULD NOT POINTED OUT ANY DIFFERENCE IN FACT S OF PRESENT YEAR AS COMPARED TO FACTS OF ASSESSMENT YEAR 2011-12 AND HE NCE, WE FIND NO REASON TO TAKE A CONTRARY VIEW IN THE PRESENT YEAR AND THE REFORE, RESPECTFULLY FOLLOWING THE EARLIER TRIBUNAL ORDER, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 08 TH JUNE, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.