DCIT, New Delhi V. M/s. Sir Ganga Ram Hospital, New Delhi

ITA 540/DEL/2014

• Counselvise Citation: 54020114 RSA 2014
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 23-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHIRANJAN SENAPATI
• Assessee Lawyers: VIPIN AGGARWAL; SAMIR KUDSIA

Judgement Text

1 IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH SMC - 2 : NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 540 /DEL/201 4 A.Y. : 20 10 - 11 DEPUTY COMMISSIONER OF INCOME TAX, VS. M/S SIR GANGA RAM HOSPITAL, CIRCLE - 51(1), OLD RAJINDER NAGAR, NEW DELHI NEW DELHI ROOM NO. 507, AAYAKAR BHAVAN, LAKSHIMI NAGAR, NEW DELHI (PAN : DELS26028C) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. SUDHIRANJAN SENAPATI, SR. DR ASSESSEE BY : SH. VIPIN AGGARWAL, CA & SH. SAMIR KUDSIA, CA DATE OF HEARING : 0 6 - 0 8 - 2015 DATE OF ORDER : 07 - 0 8 - 2015 O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - X XX , NEW DELHI DATED 20 . 11 .201 3 PERTAINING TO ASSESSMENT YEAR 20 10 - 11 . 2. T HE GROUNDS OF APPEAL READ AS UNDER: - I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT(A) HAS ERRED IN AGREEING TO THE CONTENTION OF THE ASSESSEE THAT THERE IS NO RELATIONSHIP AS A PRINCIPAL AND AGENT BETWEEN THE ASSESSEE AND THE BANK AND HENCE THE LD. CIT(A) E RRONEOUSLY HELD THAT THE CHARGES PAID BY THE ASSESSEE TO THE BANK WAS BANK FEE AND NOT 2 COMMISSION PAID TO BANK , THUS SECTION 194H WAS HELD TO BE NOT APPLICABLE IN THIS CASE. II) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF A PPEAL AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE - DEDUCTOR IS A REGISTERED SOCIETY WHICH PROVIDES HEALTHCARE SERVICES TO PATIENTS. IN THIS CASE, PROCEEDINGS U/S. 201 OF THE I.T. ACT, 1961 WAS INITIATED BY WAY OF A NOTICE U/S. 201 R.W.S. 201(1A) OF THE ACT DATED 24.1.2012 WHICH WAS DULY SERVED ON THE HOSPITAL AND INQUIRED THEREIN THE DETAILS OF COMMISSION ALLOWED TO VARIOUS BANK ON CREDIT CARD TRANSACTION DURING THE FT 2009 - 10 AND ALSO INQUIRED ABOUT TAX DEDUCTED TAX SOURC E U/S. 194H OF THE I.T. ACT. IN REPLY, IT HAS BEEN SUBMITTED THAT THE PROVISION OF SECTION 194H ARE NOT ATTRACTED ON SUCH ELEMENT TO THE TUNE OF RS. 49,57,714/ - GRANTED TO VARIOUS BANKS. THEY ALSO PLEADED BEFORE THE AO THERE IS NO PRINCIPLE AND AGENT RE LATIONSHIP BETWEEN THE HOSPITALS AND THE BANK. THE PAYMENTS MADE TO THE BANKERS ARE IN THE NATURE OF DISCOUNTING CHARGES SO AS TO ENSURE PROMPT AND IMMEDIATE PAYMENT TO THE HOSPITAL BY THE BANKERS THROUGH THE CREDIT CARD FACILITIES AVAILED BY PATIENTS. THE AO CONSIDERED THE REPLY OF THE ASSESSEE AND REJECTED THE CLAIM OF THE ASSESSSEE. HE HAS FORMED AN OPINION THAT AMOUNT RETAIN BY THE BANKERS DURING THE COURSE OF PAYMENTS TO HOSPITAL BY WAY OF CREDIT CARD SYSTEM IS A COMMISSION WHICH ATTRACTS THE PROV ISION OF SECTION 194H OF THE I.T. ACT. ACCORDINGLY, THE AO CALCULATED THE TDS AMOUNT OF RS. 5,61,709/ - AND INTEREST OF RS. 2,17,855/ - . THUS, THE AO CREATED A LIABILITY OF RS. 7,79,564/ - U/S. 201/201(1A) OF THE INCOME TAX ACT, 1961 VIDE HIS ORDER DATED 13.3.2012. 3 4. AGGRIEVED WITH THE AFORESAID ORDER DATED 13/3/32012 , ASSESSEE APPEALED BEFORE THE LD. CIT(A) - XXX, NEW DELHI , WHO VIDE IMPUGNED ORDER DATED 20 . 11 .201 3 HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGAINST THE ABOVE MENTIONED IMPUGNE D ORDER DATED 20 . 11 .201 3 , THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL. 7. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND REQUESTED THAT THE SAME MAY BE UPHELD. 8. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE BEFORE ME, ESPECIALLY THE ORDERS OF THE REVENU E AUTHORITIES. I AM OF THE CONSIDERED VIEW THAT THERE IS NO RELATIONSHIP AS A PRINCIPAL AND AGENT BETWEEN A SSESSEE AND BANK. THIS VIEW IS SUPPORTED BY THE ORDER OF THE ITAT, MUMBAI IN THE CASE OF I.T.O. VS . JET A IRWAY INDIA LTD ( 36 TAXMAN.COM 379) AND DECISION OF THE ITAT, HYDERABAD IN THE CASE OF D CIT VS . VAH MAGNA R ETAIL P LTD HYDERABAD . IN THESE CASES, THE TRIBUNAL HAS HELD THAT SECTION 194H IS APPLICABLE WHERE ANY COMMISSION IS BEING PAID BY THE P RINCIPAL TO THE C OMMISSION A GENT. THE CHARGE PAID TO THE B ANK WERE NOT IN NATURE OF COMMISSION PAYMENT , BUT IT WAS FEES CHARGED BY THE B ANK FOR THE SERVICES. I FIND THAT THE PROVISION OF SECTION 194H OF THE I.T. ACT WERE NOT APPLICABLE AS B ANK WERE MAKING PAYMENT TO THE A SSESSEE AFTER DEDUCTING CERTAIN FEES AS PER THE TERMS AND CONDITIONS IN THE CREDIT CARDS AND IT WAS NOT A COMMISSION BUT A FEES DEDUCTED BY THE BANKS. IN MY VIEW THAT THE CREDIT CARD COMMISSION IS NOTHING BUT REGULAR BANK CHARGE AND IS NOT SUBJECT TO TDS U/S 194 H. S INCE THIS ISSUE IS ALREADY DECIDED BY THE T RIBUNAL AS 4 AFORESAID IN FAVOUR OF ASSESSEE, THEREFORE, RESPECTFULLY FOLLOWING THE PRECEDENTS, AS AFORESAID, THE DEMAND RAISED BY THE AO U/S 201(1)/201(LA) OF THE I.T. ACT WAS RIGHTLY DELETED BY THE LD. CIT(A) . IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS, I DO NOT SEE ANY REASON TO INTERFERE WITH THE WELL REASONED ORDER PASSED BY THE LD. CIT(A), HENCE, I UPHOLD THE SAME AND DISMISS THE APPEAL FILED BY THE REVENUE . 9 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 / 8 /201 5 . SD/ - [ H.S. SIDHU ] JUDICIAL MEMBER DATE: 7 / 8 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4.CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 5