ITO TDS 1(2)(4), MUMBAI V. INFINITI RETAIL LTD (CROMA), MUMBAI

ITA 4011/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2635 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Department
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 26-06-2015
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ./ ITA NO. 4011 / MUM/20 1 5 ( / ASSESSMENT YEAR : 20 11 - 20 1 2 ITO (TDS) - 1(2)(4 ), MUMBAI - 52 VS. M/S INFINITI RETAIL LTD.(CROMA), BOMBAY HOUSE, 24, HOME MODI STREET, FORT, MUMBAI - 400001 ./ ./ PAN/GIR NO. : A ACCV 12726 H ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI N EIL PHILIP /ASSESSEE BY : SHRI NITESH JOSHI / DATE OF HEARING : 1 3 / 0 7 /201 6 / DATE OF PRONOUNCEMENT 14 / 07 /201 6 / O R D E R THIS IS AN APPEAL FILED B Y THE REVENUE AGAINST THE ORDER OF C IT(A) - MUMBAI, FOR THE ASSESSMENT YEAR 20 1 1 - 20 1 2 . 2. IN THIS APPEAL THE REVENUE IS AGGRIEVED FOR HOLDING THAT ASSESSEE WAS NOT IN DEFAULT U/S.201 (1) /201 (1 A ) OF THE I.T.ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. DURING THE COURSE OF ASSESS MENT THE AO HELD THAT ASSESSEE WAS IN DEFAULT FOR NON - DEDUCTION OF TAX AT SOURCE U/S.194H ON PAYMENT OF CREDIT CARD COLLECTION CHARGES TO BANK. BY THE IMPUGNED ORDER THE CIT(A) HELD THAT ASSESSEE WAS NOT IN DEFAULT INSOFAR AS NO TAX WAS DEDUCTIBLE AT SOURC E IN RESPECT OF COMMISSION RETAINED BY CARD COMPANIES, FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF JET AIRWAYS LTD., ITA NO.743 9 ,7440 & 7441/MUM/2010, ORDER DATED 17 - 7 - 2013. 3. LD. AR PLACED ON RECORD ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE DATED 13 - 4 - 2016, WHEREIN THE TRIBUNAL HELD AS UNDER : - ITA NO. 4011 / 1 5 2 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISION OF THE TRIBUNAL AND ALSO THE RELEVANT MATERIAL PLACED BEFORE US. ON PERUSAL OF THE SA ID DECISION OF THE TRIBUNAL (SUPRA) DATED 1.5.2015, WE FIND, ON IDENTICAL ISSUE, THE TRIBUNAL DISMISSED THE REVENUES APPEAL AND UPHELD THE DECISION OF THE CIT (A) VIDE PARA 2.1 OF ITS ORDER. CONSIDERING THE SIGNIFICANCE OF THE SAID PARA 2.1 OF THE TRIBUNA LS ORDER (SUPRA) AND FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAME IS EXTRACTED AS UNDER: 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF LD DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF ARE THAT THE ASSESSEE IS IN THE BUSINESS OF RETAILS IN ELECTRONIC GOODS, KITCHEN APPLIANCES, COMPUTERS, LAPTOPS AND RELATED ACCESSORIES THROUGH DEDICATED OUTLETS CALLED CROMA. THE ASSESSEE DECLARED LOSS OF RS. 85,33,61,594/ - IN ITS RETURN FILED ON 29.9.2009. THE LD AO DURING THE ASSESSMENT PRO CEEDINGS ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY THE PAYMENTS OF CHARGES TO BANKS IN RESPECT OF SALES EFFECTED THROUGH CARD MECHANISM SHOULD NOT BE SUBJECTED TO TDS U/S 194H OF THE ACT. THE ASSESSEE VIDE COMMUNICATION DATED 15.12.2011 EXPLAINED THAT THE PROVISIONS OF SECTION 194H OF THE ACT WILL BE ATTRACTED ONLY WHEN ONE PERSON ACTS ON BEHALF OF ANOTHER, THEREBY, CREATING A PRINCIPLE AND AGENT RELATIONSHIP AND FURTHER IN THE INSTANT CASE, THE SALE IS CONDUCTED BY THE ASSESSEE ON ITS OWN AND NOT THROUGH THE BANK AND FURTHER THE TRANSACTION MAY TERMED AS CREDIT CARD MSF CHARGES BUT IN CHARGES, CHEQUE BOOK REQUEST CHARGES, ETC. THE LD AO COMPLETED THE ASSESSMENT DISALLOWING THE EXPENDITURE OF RS. 5,02,36,000/ - INCURRED ON ACCOUNT OF PAYMENT OF PROCESSING CH ARGES TO HDFC BANK ON TOTAL AMOUNT SWIPED THROUGH CUSTOMER CREDIT CARD AND EXPENDITURE OF RS. 49,02,000/ - ON ACCOUNT OF VARIOUS OTHER BANK CHARGES (CASH MANAGEMENT SERVICES) U/S 40(A)(IA) OF THE ACT. ACCORDING TO THE LD AO, TAX SHOULD HAVE BEEN DEDUCTED AT SOURCE U/S 194 OF THE ACT. ON APPEAL, LD CIT (A) EXAMINED THE FACTS AND FOLLOWING THE DECISION IN THE CASE OF AHMEDABAD STAMP VENDORS ASSOCIATION VS. UOI (257 ITR 202) AND TATA TELE SERVICES LTD VS. DCIT (TDS) A DECISION FROM BANGALORE BENCH (ITA NOS.308 TO 310 AND 393 TO 396) ORDER DATED 27/11/2012, WHEREIN, IT WAS HELD THAT THERE IS NO REQUIREMENT OF MAKING TDS ON THE COMMISSION RETAINED BY CARD COMPANIES, OPINED THAT THE PROVISIONS OF SECTION 40(A)(IA) R.W.S 194H OF THE ACT ARE NOT APPLICABLE, DELETED T HE ADDITION. WE FIND NO INFIRMITY IN THE CONCLUSION OF THE LD CIT (A) UNDER THE FACTS AVAILABLE ON RECORD. HIS STAND IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. 5. CONSIDERING THE ABOVE SETTLED NATURE OF THE ISSUE AND ALSO RESPECTFULL Y FOLLOWING THE DECISION OF THE TRIBUNAL FOR THE AY 2009 - 2011 AND ALSO FOLLOWING THE PRINCIPLES OF CONSISTENCY, WE ARE OF THE OPINION, THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. ITA NO. 4011 / 1 5 3 4. WE HAVE GONE THROUGH THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE WHEREIN EXACTLY SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY DISALLOWING REVENUES APPEAL. AS THE FACTS AND CIRCUMSTANCES DURING THE YE AR UNDER CONSIDERATION ARE SAME, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A). 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 14 /07 / 201 6 . SD/ - ( R.C.SHARMA ) / ACCOUNTANT MEMBER MUMBAI ; DATED 14 /07 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//