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04-07-2019, Future Value Retail, Section 40(a)(ia), 194H, Tribunal Mumbai

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1 week 6 days ago #9988 by amit
Section - 40(a)(ia), 194H, 194D, 44AB, 201(1), 14A
Order Date - 04-07-2019
Favouring - Assessee
Court - Tribunal Mumbai
Appellant - ACIT
Respondent - Future Value Retail Ltd.
Justice - C.N PRASAD JM & RAMIT KOCHAR AM
Citation - 719Taxpundit77
Appeal No. - I.T.A. No.6705/Mum/2016
Asstt. Year - 2012-13

Order

PER : RAMIT KOCHAR

This appeal, filed by Revenue, being ITA No. 6705/Mum/2016, is directed against appellate order dated 23.08.2016, passed by learned Commissioner of Income Tax (Appeals)-16,Mumbai (hereinafter called “the CIT(A)”) in ITA no. CIT(A)/ I.T.305/DCIT-9(3)(2)/2015-16, for assessment year 2012-13, the appellate proceedings had arisen before learned CIT(A) from assessment order dated 29.03.2015 passed by learned Assessing Officer (hereinafter called “the AO”) u/s 143(3) of the Income-tax Act, 1961 (hereinafter called “the Act”) for AY 2012-13.

2. The grounds of appeal raised by Revenue in memo of appeal filed with Income-Tax Appellate Tribunal, Mumbai (hereinafter called “the tribunal”) read as under:-

“i) "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to recompute the disallowance u/s.14A read with Rule 8D by taking into consideration the actual indirect expenses, without appreciating the fact that the AO has properly recorded his satisfaction for invoking the provisions of rule 8D and therefore since Rule 8D is invoked, the disallowance has to be worked out as per the formula prescribed therein and there is no scope for any deviation thereform?"

ii) "Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the disallowance of Rs.34,62,22,786/- undersection 40(a)(ia) of the IT Act on account of not deducting the TDS on credit card commission charged by bank on credit card transactions?"

iii) "Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that there is no relationship of a Principal and Commission Agent between the assessee and the acquired bank, without appreciating the fact that the acquirer bank, without appreciating the fact that the acquirer bank acts as a conduit or middleman between the assessee and the issuing bank for credit card processing services

iv) Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that there must be a Principal and Commission Agent relationship between the assessee and acquirer bank to be a commission u/s.194H, by relying on the decision of the Hon'ble ITAT, Mumbai in the case of SKOL Breweries Ltd Vs. ACIT(ITA No. 6175/Mum/2011), without appreciating that in the case cited supra, it was held that Section 194H talks about the payment to a recipient which is the income by the Hon'ble ITAT the way of commission or brokerage and no finding has been given therein by the Hon'ble ITAT that the relationship between the payer and the payee must necessarily be of a principal and agent, for the applicability of Section 194H?"

v) "Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the payment made to the bank for credit card services is bank charges and not commission and therefore the provisions of Section 194H are not applicable to such payments, without appreciating that in the assessee's case the bank charges has the character of commission?"

vi) "Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that the payment made by the assessee to the acquirer bank as credit commission is not commission within the meaning the Section 194H and thus not liable for tax deduction at source, without appreciating that commission of any kind is covered within the scope of Section 194H and no exception has been provided therein?"

vii) "Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in not treating payment for credit card processing services as 'fees for technical services' u/s. 194J and thus not liable for deduction of tax at source relying on the Hon'bleMadras High Court's decision in the case of Skycell Communications Ltd. Vs DCIT[2001] 251 ITR 53 (Mad) without appreciating the distinguishing fact that the system of credit card processing is not a simple and standard facility provided by the acquirer bank to all those willing to avail it for a fee?"

viii) Whether on the facts and in the circumstances of the case and in aw. the learned CIT(A) erred in holding that if any technology or machine is developed by human beings and put to operation on out-mode without involving much human intervention, then it cannot be treated as a technical service u/s. 194J of the Act, without appreciating that such systems necessarily involve human intervention?"

ix) "Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the disallowance of Rs.6,76,46,117/- under section 40(a)(ia) of the IT Act on account of not deducting the TDS on cash pick up services?"

The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the ACIT 9(3)(2) be restored.

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