BOB FINANCIAL SOLUTIONS LIMITED, MUMBAI V. DCIT-2(1)(1), MUMBAI

ITA 6724/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6971 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 28-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVITA P. KAUSHIKLD
• Assessee Lawyers: KISHOR C. DALALLD
• Keywords: TDS

Judgement Text

ITA NO.6724/MUM/2018 BOB FINANCIAL SOLUTIONS LTD ASSESSMENT YEAR :2015-16 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.6724/MUM/2018 ( / ASSESSMENT YEAR : 2015-16 ) BOB FINANCIAL SOLUTIONS LIMITED 2 ND FLOOR, BARODA HOUSE S.V. ROAD, JOGESHWARI WEST MUMBAI- 400 062. / VS. D CIT - CIRCL E - 2(1) ( 1 ) 561, 5 TH FLOOR AAYKAR BHAVAN, M.K. ROAD MUMBAI- 400 020. %& ./ ./PAN/GIR NO. AAACB-1989-L ( &( /APPELLANT ) : ( )*&( / RESPONDENT ) ASSESSEE BY : SHRI KISHOR C. DALAL-LD.AR REVENUE BY : MS. KAVITA P. KAUSHIK-LD. DR / DATE OF HEARING : 03/02/2020 / DATE OF PRONOUNCEMENT : 05/02/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2015-16 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-4 , MUMBAI, [IN SHORT REFERRED TO AS CIT(A)], APPEAL NO. CIT(A)-4/IT-203/DCIT-2(1)(1)/2017-18, DA TED 06/09/2018 ON FOLLOWING GROUNDS OF APPEAL: - ITA NO.6724/MUM/2018 BOB FINANCIAL SOLUTIONS LTD ASSESSMENT YEAR :2015-16 2 ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW LEARNED ASSESSING OFFICER ERRED IN DISALLOWING TDS PAID ON LICENSE FEES ON VISA CAR D AS PER AGREEMENT WITH VISA CARD OF RS.5505877/- AND CIT(A) ERRED IN CONFIRMING THE SAME. AS EVIDENT, THE SOLE ISSUE THAT ARISES FOR OUR CONS IDERATION IS DISALLOWANCE OF TDS PAID ON LICENSE FEES ON VISA CA RDS FOR RS.55.05 LACS UNDER THE TERMS OF AGREEMENT. 2. THE LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE ( AR), AT THE OUTSET, SUBMITTED THAT THE ISSUE STOOD SQUARELY COV ERED IN ASSESSEES FAVOR BY THE FOLLOWING DECISIONS OF THIS TRIBUNAL I N ASSESSEES OWN CASE FOR VARIOUS YEARS: - I) ITA NOS.4882,2475,6527/MUM/2010 FOR AYS 2003-04 TO 2005-06 COMMON ORDER DATED 20/06/2012 II) ITA NO.7660/MUM/2011 FOR AY 2008-09 ORDER DATED 05/04/2013 III) ITA NO.1436 & 1437/MUM/2015 FOR AYS 2010-11 & 2011-12, ORDER DATED 22/07/2016 IV) ITA NO.4485, 4297/MUM/2017 FOR AY 2012-13 ORDER DATED 07/05/2019 THE LD. DR ALTHOUGH RELIED ON THE STAND OF LOWER AU THORITIES BUT COULD NOT CONTROVERT THE FACT THAT THE ISSUE HAS ALREADY BEEN DELVED UPON BY TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEARS. THE LD. DR SUBMITTED THAT LD. CIT(A) HAS DISTINGUISHED THE FACTUAL MATRI X IN THIS YEAR. 3. BRIEFLY STATED, THE ASSESSEE WAS ASSESSED U/S 14 3(3) ON 18/12/2017 WHEREIN IT TRANSPIRED THAT THE ASSESSEE CLAIMED EXPENSES TOWARDS NON-REIMBURSABLE TDS FOR VISA CARD AND MAST ERCARD. ALTHOUGH THE ASSESSEE DEFENDED THE SAME BY DRAWING ATTENTION TO THE FAVORABLE ORDERS OF EARLIER YEARS, HOWEVER, DISREGARDING THE SAME, LD. AO DISALLOWED THE SAME. ITA NO.6724/MUM/2018 BOB FINANCIAL SOLUTIONS LTD ASSESSMENT YEAR :2015-16 3 4. BEFORE LD. CIT(A), THE ASSESSEE REITERATED THAT IN TERMS OF RESPECTIVE AGREEMENTS WITH VISA CARD AND MASTER CAR D, IT AGREED TO PAY SERVICE CHARGES & LICENSE FEES WITHOUT DEDUCTIO N OF TAX AND TOOK OVER AS WELL AS DISCHARGED THE TDS LIABILITY OF ITS LICENSORS. THE ASSESSEE SUBMITTED THE COPIES OF AGREEMENT ENTERED INTO WITH VISA CARD AND MASTER CARD. HOWEVER, LD. CIT(A) OPINED TH AT ALTHOUGH THE AGREEMENT WITH MASTER CARD CONTAINED SPECIFIC STIPU LATION REGARDING ASSESSEES LIABILITY TO PAY TAXES / TDS IN RESPECT OF SERVICE CHARGES PAID BY IT BUT THERE WAS NOTHING OF THIS SORT IN THE AGR EEMENT WITH VISA CARDS. THE ARTICLE-11 OF AGREEMENT WITH VISA CARD MANDATED ASSESSEE TO PROVIDE PROOF OF PAYMENT OF TAXES AND NOTHING MORE. THIS ARTICLE DID NOT MAKE THE PAYMENT OF TAXES AS ASSESSEES LIABILITIES AND THEREFORE, THESE FACTS WERE NOT CLEARLY BROUGHT OUT ON RECORD IN EAR LIER YEARS. THEREFORE, DISTINGUISHING THE FACTUAL MATRIX OF EARLIER YEARS, LD. CIT(A) CONFIRMED DISALLOWANCE OF TDS PAID ON VISA CARDS AND DELETED DISALLOWANCE OF TDS PAID ON MASTER CARDS. AGGRIEVED, THE ASSESSEE I S UNDER FURTHER APPEAL BEFORE US. 5. AFTER CAREFUL CONSIDERATION OF FACTUAL MATRIX AS ENUMERATED HEREINABOVE, WE FIND THE DISPUTE TO BE IN NARROW CO MPASS. WE FIND THAT PRIMARY REASON TO CONFIRM THE DISALLOWANCE ON VISA CARD IS THE FACT THAT THE TERMS OF MASTER CARD AND VISA CARDS HAVE BEEN F OUND TO BE AT VARIANCE. AS NOTED BY LD. CIT(A), ARTICLE-11 OF AGR EEMENT WITH VISA CARDS MANDATED ASSESSEE TO PROVIDE PROOF OF PAYMENT OF TAXES AND NOTHING MORE AND THERE WERE NO SPECIFIC STIPULATION S THAT THE PAYMENT OF THE SAME WOULD CONSTITUTE ASSESSEES LIABILITY. HOW EVER, THE FACT THAT WHETHER THE SAID EXPENDITURE WAS REIMBURSABLE BY VI SA OR NOT, WAS NOT ITA NO.6724/MUM/2018 BOB FINANCIAL SOLUTIONS LTD ASSESSMENT YEAR :2015-16 4 BROUGHT ON RECORD. THE ANSWER TO THE SAME WOULD BE VITAL TO CLINCH THE ISSUE IN PROPER PERSPECTIVE. OBVIOUSLY, IF THE EXPE NDITURE WAS NON- REIMBURSABLE IN NATURE AND IT WAS BORNE BY THE ASSE SSEE HIMSELF, THE SAME WOULD CERTAINLY BECOME ASSESSEES LIABILITY AN D HENCE AN ALLOWABLE EXPENDITURE AS HELD IN EARLIER YEARS. ON THE CONTRARY, IF THE EXPENDITURE WAS REIMBURSABLE IN NATURE, IT WOULD MA TERIALLY ALTER THE ASSESSEES CLAIM OF DEDUCTION. THE SUBMISSIONS MADE BY LD. AR ALSO DO NOT THROW MUCH LIGHT ON THIS FACT AND THE OBSERVATI ON MADE BY LD. CIT(A) HAS REMAINED UNADDRESSED. THEREFORE, WITH A VIEW TO BRING ON RECORD CLEAR FACTS AND TO DISPEL THE CONCERNS RAISED BY LD . DR, WE RESTORE THE MATTER BACK TO THE FILE OF LD. CIT(A) WITH A DIRECT ION TO ASCERTAIN THE CORRECT FACTS. THE ASSESSEE IS DIRECTED TO PROVIDE THE REQUISITE DETAILS / INFORMATION. NEEDLESS TO ADD THAT, IF THE EXPENDITU RE WAS NON- REIMBURSABLE IN NATURE, THE SAME WOULD BE AN ALLOWA BLE DEDUCTION OTHERWISE NOT. 6. THE APPEAL STANDS ALLOWED FOR STATISTICAL PURPOS ES. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH FEBRUARY, 2020. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 05/02/2020 SR.PS, JAISY VARGHESE !'! / COPY OF THE ORDER FORWARDED TO : 1. &( / THE APPELLANT 2. )*&( / THE RESPONDENT ITA NO.6724/MUM/2018 BOB FINANCIAL SOLUTIONS LTD ASSESSMENT YEAR :2015-16 5 3. 1 ( ) / THE CIT(A) 4. 1 / CIT CONCERNED 5. 23),4 , 4 , / DR, ITAT, MUMBAI 6. 3567 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.