DCIT 2(2), MUMBAI V. INFINITY RETAIL LTD, MUMBAI

ITA 4461/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92339 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 20-04-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBEDR

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.4461/MUM/2013 ASSESSMENT YEAR: 2009-10 DCIT-2(2), ROOM NO.545, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 / VS. INFINITY RETAILS LIMITED, BOMBAY HOSUE, 24 HOMI MODI STREET, FORT, MUMBAI-400001 ( / REVENUE) ( !'# /ASSESSEE) P.A. NO. AACCV1726H / REVENUE BY SHRI SACHIDANAND DUBE-DR !'# / ASSESSEE BY NONE $ % & #' / DATE OF HEARING 20/04/2015 & #' / DATE OF ORDER: 01/05/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 14/02/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, INFINITY RETAILS LIMITED 2 IN ALLOWING THE PAYMENT OF COMMISSION ON CREDIT CAR DS TO VARIOUS BANKS IGNORING THE PROVISIONS OF SECTION 40 (A)(IA) READ WITH SECTION 194H OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT). 2. DURING HEARING OF THIS APPEAL, NONE WAS PRESENT FOR THE ASSESSEE, IN SPITE OF SERVICE OF NOTICE AND ALSO THE FACT THAT ON 16/09/2014, THE APPEAL WAS ADJOURNED A T THE REQUEST OF THE ASSESSEE. THUS, WE HAVE NO OPTION BU T TO PROCEED EX-PARTY QUA THE ASSESSEE AND TEND TO DISPO SE OF THIS APPEAL ONT HE BASIS OF MATERIAL AVAILABLE ON R ECORD. SHRI SACHIDANAND DUBEY, LD. DR, DEFENDED THE CONCLU SION ARRIVED AT IN THE ASSESSMENT ORDER BY ADVANCING HIS ARGUMENTS IDENTICAL TO THE GROUND RAISED. 2.1. WE HAVE CONSIDERED THE SUBMISSIONS OF LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE F ACTS, IN BRIEF, ARE THAT THE ASSESSEE IS IN THE BUSINESS OF RETAILS IN ELECTRONIC GOODS, KITCHEN APPLIANCES, COMPUTERS, LA PTOPS AND RELATED ACCESSORIES THROUGH DEDICATED OUTLETS C ALLED CROMA. THE ASSESSEE DECLARED LOSS OF RS.85,33,61 ,594/- IN ITS RETURN FILED ON 29/09/2009. THE LD. ASSESS ING OFFICER DURING ASSESSMENT PROCEEDINGS ASKED THE ASS ESSEE 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 A SSESSEE VIDE COMMUNICATION DATED 15/12/2011 EXPLAINED THAT THE PROVISIONS OF SECTION 194H OF THE ACT WILL BE ATTRA CTED ONLY WHEN ONE PERSON ACTS ON BEHALF OF ANOTHER, THEREBY, INFINITY RETAILS LIMITED 3 CREATING A PRINCIPLE AND AGENT RELATIONSHIP AND FUR THER IN THE INSTANT CASE, THE SALE IS CONDUCTED BY THE ASSE SSEE ON ITS OWN AND NOT THROUGH THE BANK AND FURTHER THE TRANSACTION MAY TERMED AS CREDIT CARD MSF CHARGES B UT IN ESSENCE, IT IS IN THE NATURE OF BANK CHARGES, STOP PAYMENT CHARGES, CHEQUE BOOK REQUEST CHARGES, ETC. THE LD. ASSESSING OFFICER COMPLETED THE ASSESSMENT DISALLOW ING THE EXPENDITURE OF RS.5,02,36,000/- INCURRED ON ACCOUNT OF PAYMENT OF PROCESSING CHARGES 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)(I A) OF THE ACT. ACCORDING TO THE LD. ASSESSING OFFICER, TA X SHOULD HAVE BEEN DEDUCTED AT SOURCE U/S 194 OF THE ACT. ON APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) EXAMINED THE FACTS AND BY 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 A ND 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 A CT ARE NOT APPLICABLE, DELETED THE ADDITION. WE FIND NO INFIRM ITY IN THE CONCLUSION OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS) UNDER THE FACTS AVAILABLE ON RECORD. HIS STAND IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. INFINITY RETAILS LIMITED 4 THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. DR, AT THE CONCLUSION OF HEARING ON 20/04/2015. SD/- SD/- ( R.C.SHARMA ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ) DATED : 01/05/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. +,-. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. $ 1# ( +, ) / THE CIT, MUMBAI. P4. $ 1# / CIT(A)- , MUMBAI 5. 34 /# ! , +,' +!5 , $ % / DR, ITAT, MUMBAI 6. 6 7% / GUARD FILE. / BY ORDER, 03,# /# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI