DCIT (OSD) 8(2), MUMBAI V. HOTEL TUNGA REGENCY P.LTD, MUMBAI

ITA 5283/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9441 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 16-02-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 30-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Keywords: Non-deduction of tax

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BE NCH, MUMBAI ! , ' #$ % && , #$ ' BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ./I .T.A. NO. 5283/MUM/2013 ( ( ( ( ( / ASSESSMENT YEAR : 2010-11 THE DCIT (OSD)-8(2), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. M/S. HOTEL TUNGA REGENCY PVT. LTD., PLOT NO. 16, MIDC, CENTRAL ROAD, ANDHERI(E), MUMBAI-400 093 $) ' ./ %* ./ PAN/GIR NO. : AAACH 8822N ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . / APPELLANT BY: SHRI VIJAY KUMAR BORA ,-)+ / . / RESPONDENT BY: NONE / 01' / DATE OF HEARING :16.02.2015 23( / 01' / DATE OF PRONOUNCEMENT :16.02.2015 #4 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-17, MUMBAI DT. 03.05.2013 PERTAINING TO ASSESSMENT YEAR 2010-11. 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD . CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 21,16,890/- MADE U /S. 40(A)(IA) OF THE ACT BY THE AO. ITA NO. 5283/M/2013 2 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF HOTEL GIVING SERVICES OF LODGING, BOARDING AND RUNNING RESTAURANT BUSINESS W ITHIN THE PREMISES. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED COMMI SSION ON CREDIT CARDS OF RS. 21,09,519/- UNDER THE HEAD OPERATIVE EXPENS ES. THE COMMISSION WAS PAID TO VARIOUS BANKS VIZ., AMEX CRE DIT CARD, AXIS CREDIT CARD, CITY CREDIT CARD AND HDFC CREDIT CARD. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE AMOUNT OF RS. 21,16,890/- SHOULD NOT BE DISALLOWED U/S. 40A(IA) OF THE ACT, IF TDS IS NOT M ADE AS PER PROVISIONS OF SEC. 194H OF THE ACT. 3.1. THE ASSESSEE EXPLAINED THE NATURE OF TRANSACTI ON WHICH IS INCORPORATED BY THE AO AT PARA-7.3 OF HIS ORDER. I T WAS EXPLAINED THAT THE MERCHANT ESTABLISHMENT COMMISSION IS NOT SEPARATELY PAID BY THE MERCHANT AND HAS RECEIVED BY THE BANK BY WAY OF PR OCESSING CHARGES OR DISCOUNTING CHARGES E.G. IF THE BILL AMOUNT PAID T HROUGH THE CARD IS RS. 100/-, THE MERCHANT WOULD GET SAY RS. 97 FROM THE B ANK AGAINST THE INVOICE. THE BANK WOULD COLLECT RS. 100/- FROM THE CARD HOLDERS, RS. 3 BEING THE ME COMMISSION OF THE BANK. THE AO DID NO T ACCEPT THE SUBMISSIONS MADE BY THE ASSESSEE. STRONGLY PLACING RELIANCE ON THE PROVISIONS OF SEC. 194H OF THE ACT, THE AO DISALLOW ED RS. 21,16,890/- FOR NON-DEDUCTION OF TAX U/S. 40A(IA) OF THE ACT. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND ONCE AGAIN EXPLAINED THE NATURE OF TRANSACTION. IT WAS STRONGLY CONTENDED BEFORE THE LD. CIT(A) THAT HYDERABAD BENCH OF THE T RIBUNAL HAS DECIDED A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE AND AGAIN ST THE REVENUE. FURTHER, CBDT NOTIFICATION NO. 56/2012 (F. NO. 275 /53/2012-IT(B) WAS BROUGHT TO THE NOTICE OF THE LD. CIT(A) AS PER WHIC H NO TDS IS REQUIRED ITA NO. 5283/M/2013 3 TO BE DEDUCTED ON CREDIT CARD OR DEBIT CARD COMMIS SION. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND THE D ECISION OF THE TRIBUNAL HYDERABAD BENCH IN THE CASE OF VAH MAGNA RETAIN (P) LTD, THE LD. CIT(A) DELETED THE ADDITION. 5. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 6. NONE APPEARED ON BEHALF OF THE ASSESSEE THEREFOR E, WE PROCEED TO DECIDE THE APPEAL EX PARTE ON MERIT. 7. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED TH E ASSESSMENT ORDER. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW. WE FIND THAT THE FACTS UNDER CONSIDERATION ARE SIMILAR TO THE FACTS CONSIDERED BY THE TRIBUNAL, HYDERABAD BENCH IN THE CASE OF VAH MAGNA RETAIN (P) LTD (SUPRA) WHICH DECISION HAS BEEN FOLLOWED BY THE LD. CIT(A). THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE W ITH THE FINDINGS OF THE LD. CIT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON 16 TH FEBRUARY, 2015. SD/- SD/- (SANJAY GARG ) (N.K. BILLAIYA) #$ /JUDICIAL MEMBER ' #$ / ACCOUNTANT MEMBER MUMBAI; 5# DATED : 16 TH FEBRUARY, 2015 . . ./ RJ , SR. PS ITA NO. 5283/M/2013 4 #4 #4 #4 #4 / // / ,0 ,0 ,0 ,0 6(0 6(0 6(0 6(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 8& ,0 , , / DR, ITAT, MUMBAI 6. &9 : / GUARD FILE. #4 #4 #4 #4 / BY ORDER, -0 ,0 //TRUE COPY// ; ;; ; / < < < < % % % % (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI