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| The Tax Publishers2019 TaxPub(DT) 1867 (Bom-HC) : (2020) 420 ITR 0385 : (2019) 307 CTR 0466 INCOME TAX ACT, 1961
Section 194H
As bank did not act as an agent of assessee while processing credit card payments, the charge collected by bank for such service did not amount to commission within the meaning of section 194H and consequently, such commission could not be disallowed under section 40(a)(ia).
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Tax deduction at source - Under section 194H - Commission paid to banks on processing of credit card transactions -
Assessee-company was engaged in business of setting up of and operating of deluxe hotels. While scrutinizing assessee's return of income, AO noticed that assessee had not deducted tax at source in terms of section 194H, in relation to commission paid to banks on processing of credit card transactions. Accordingly, he disallowed corresponding expenditure by invoking section 40(a)(ia). Held: Since bank did not act as an agent of assessee while processing credit card payments, the charge collected by bank for such service did not amount to commission within the meaning of section 194H and consequently, such commission could not be disallowed under section 40(a)(ia).
Relied:CIT v. JDS Apparels (P) Ltd. (2015) 370 ITR 454 (Del) : 2015 TaxPub(DT) 0232 (Del-HC) and CIT v. Larsen & Toubro Ltd. (2019) 307 CTR (Bom) 464 : (2019) 174 DTR (Bom) 246
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
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