DCIT TDS 1(1), MUMBAI V. CLEARTRIP P.LTD, MUMBAI

ITA 3950/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4218 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 30-05-2014
• Court: TRIBUNAL
• Assessee Lawyers: MUKESH B ADVANI
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER I.T.A. NO.3950/M/2014 (ASSESSMENT YEAR: 2011 - 2012 ) DCIT (TDS) - 1(1), R.NO.802, K.G. MITTAL HOSPITAL BLDG., CHARNI ROAD, MUMBAI 400 002. / VS. M/S. CLEARTRIP PVT LTD., UNIT NO.1, GROUND FLOOR, DTC BLDG, SITARAM MILLS COMPOUND, LOWER PAREL, MUMBAI 400 013. ./ PAN : AACCC6016B ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DURGA DUTT, DR / RESPONDENT BY : SHRI MUKESH B. ADVANI / DATE OF HEARING : 30.11.2015 / DATE OF PRONOUNCEMENT : 28 .01.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 30.3.2014 IS AGAINST THE ORDER OF THE CIT (A)14, MUMBAI DATED 14.3.2014 FOR THE ASSESSMENT YEAR 2011 - 2012. 2. IN THIS APPEAL, ASSESSEE RAISED THREE GROUNDS IN TOTO. THE ONLY ISSUE RAISED IS THIS APPEAL RELATES TO NON - DEDUCTION OF TDS U/S 194H OF THE ACT IN RESPECT OF THE TRANSACTIONS OF CREDIT CARD CALCULATION CHARGES COLLECTED UPFRONT FROM THE BANKS. CIT (A) GRANTED RELIEF TO THE ASSESSEE RELYING ON THE ORDER OF THE TRIBUNAL IN THE CASE OF KOTAK SECURITIES LIMITED IN ITA NO. 6657/MUM/2011 DATED 3.2.2012. CIT (A) DISCUSSED THIS ISSUE IN PARAS 3.3 AND 3.4 OF HIS ORDER BEFORE GRANTING RELIEF TO THE ASSESSEE. FOR THE SAKE OF COMPLETENESS OF THIS ORDER THE SAID P ARAS FROM THE CIT (A)S ORDER ARE EXTRACTED AS UNDER: - 3.3. I HAVE PERUSED THE FACTS OF THE CASE, SUBMISSIONS OF THE APPELLANT AND THE ORDER U/S 201(1)/201(1A) AND THE ORDER OF THE HONBLE ITAT IN THE CASE OF M/S. KOTAK SECURITIES LTD IN ITA NO.6657/MUM/2 011, DATED 3.2.2012 FOR THE AY 2004 - 05 WHEREIN THE HONBLE ITAT HAS HELD AS UNDER: 2 IN THE CASE BEFORE US, THERE IS NO PRINCIPLE AGENT RELATIONSHIP BETWEEN THE BANK ISSUED THE BANK GUARANTEE AND THE ASSESSEE. WHEN BANK ISSUES THE BANK GUARANTEE, ON BEHALF OF THE ASSESSEE, ALL IT DOES IS TO ACCEPT THE COMMITMENT OF MAKING PAYMENT OF A SPECIFIED AMOUNT TO, ON DEMAND, THE BENEFICIARY AND IT IS IN CONSIDERATION OF THIS COMMITMENT, THE BANK CHARGES A FEES WHICH IS CUSTOMARILY TERMED AS BANK GUARANTEE COMMISSIO N . WHILE IT IS TERMED AS GUARANTEE COMMISSION IT IS NOT THE NATURE OF COMMISSION AS IT IS UNDERSTOOD IN COMMON BUSINESS PARLANCE AND IN THE CONTEXT OF THE SECTION 194H. THIS TRANSACTION, IN OUR CONSIDERED VIEW, IS NOT A TRANSACTION BETWEEN PRINCIPL E AND AGENT SO AS TO ATTRACT THE TAX DEDUCTION REQU9IREMENTS U/S 194H. WE ARE, THEREFORE, OF THE CONSIDERED VIEW THAT THE CIT (A) INDEED ERRED IN HOLDING THAT THE ASSESSEE WAS INDEED UNDER OBLIGATION TO DEDUCT TAX AT SOURCE U/S 194H FROM PAYMENTS MADE BY THE ASSESSEE TO VARIOUS BANKS. AS WE HAVE HELD THAT THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S 194H, THE QUESTION OF LEVY OF INTEREST U/S 201(1A) CANNOT ARISE. IN VIEW OF THE ABOVE DISCUSSION, WE QUASH THE IMPUGNED DEMANDS U/S 201(1) AND 2 01(1A) R.W.S 194H. WE, THEREFORE, ALSO SEE NO NEED TO DEAL WITH OTHER PERIPHERAL LEGAL ISSUE RAISED BY THE ASSESSEE. 3. AFTER HEARING BOTH THE PARTIES AND CONSIDERING THE ABOVE CONCLUSIONS OF THE CIT (A), WHO RELIED HEAVILY ON THE COORDINATE BENCH DECISI ON OF THE TRIBUNAL IN THE CASE OF KOTAK SECURITIES LTD (SUPRA), WE ARE OF THE OPINION THAT THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. FURTHER, WE ALSO AGREE WITH THE LD COUNSELS ARGUMENT THAT SUCH PAYMENTS BEING PAYMENTS BETWEEN THE PRINCIPAL TO PRINCIPAL, THE TDS PROVISIONS NEED NOT BE INVOKED. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONO UNCED IN THE OPEN COURT ON 2 8 T H JANUARY, 2016. S D / - S D / - ( AMARJIT SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 2 8 .1.2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 3 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI