IN INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER I.T.A. No.5238/M/2014 (Assessment Year:2011-2012) Income Tax Officer (TDS) -2(4), M/s. Nakshatra Jewellers Pvt R.No.705, 7 th Floor, Smt. K.G. Ltd., Shop No.1, Popatlal Vs. Mittal Hospital Bldg, Charni Road Niwas, Ranade Road, Mumbai (W), Mumbai 002. 400 028. PAN : AAACN2497P ( /Appellant) (Respondent) Appellant by : Miss Anupama Singh, DR Respondent by : Shri Ruturaj H. Gurjar, AR Date of Hearing : 07.09 .2016 Date of Pronouncement : 23.09.2016 ORDER PER D. KARUNAKARA RAO, AM: This appeal filed by Revenue on 14.8.2014 is against order of CIT (A)-14, Mumbai dated 10.6.2014 for assessment year 2011-2012. In this appeal, Revenue raised following grounds which read as under:- (i) On facts and circumstances of case and in law, Ld CIT (A) erred in deleting addition made u/s 201(1) / 201(1A) of Act, holding that no TDS was deductible u/s 194H by assessee company on amount held by banks / credit agencies as service charges in respect of credit card services provided ignoring fact that in entire process of facilitation of credit card, bank is nothing but constructive agent for assessee company. (ii) On facts and in circumstances of case and in law, Ld CIT (A) erred in failing to appreciate real and true nature of relationship between assessee company and bank / credit card agencies. (iii) On facts and in circumstances of case and in law, Ld CIT (A) erred in failing to appreciate that in substance and in fact relationship between assessee company and bank / credit card agencies was in nature of principal and agents relationship and therefore, Ld CIT (A) erred in not upholding AO s conclusion of bringing charges charged to assessee company by bank / credit card agencies within purview of section 194H of Act. 2. At outset, Ld Counsel for assessee brought our attention to above grounds and mentioned that only issue raised in grounds relates to requirement of making TDS on charges relatable to credit card payments collected by banks of credit card. credit card issuing banks make TDS 2 payment to assessee after keeping portion towards service charges. In this regard, Revenue is of opinion that TDS is required to be deducted on such charges. During first appellate proceedings, CIT (A) granted relief to assessee relying on decision of ITAT, Mumbai in case of M/s. Jet Airways (India) Ltd in ITA Nos. 7439, 7440 & 7441/Mum/2010, dated 17.7.2013. Finding of CIT (A) is given in paras 4 and 4.21 of his order. Aggrieved, Revenue is in appeal before Tribunal by raising above grounds. 3. During proceedings before us, Ld Counsel for assessee heavily relied on order of CIT (A) and reiterated submissions made before lower authorities. 4. On other hand, Ld DR for Revenue relied on order of AO. 5. We have heard both parties and perused orders of Revenue Authorities as well as relevant material placed before us. On perusal of facts and issue involved in this appeal, we find, identical issue came up for adjudication before Tribunal vide ITA No.5408/M/2014 (2011-12), dated 13.4.2015 in case of M/s. Infiniti Retail Limited, wherein one of us (AM) is party to order. In said order, vide para 4, Tribunal upheld decision of CIT (A) and dismissed Revenue Appeal. Considering significance of said para and for sake of completeness of this order, same is extracted as under: - 4. We have heard both parties and perused orders of Revenue Authorities as well as cited decision of Tribunal and also relevant material placed before us. On perusal of said decision of Tribunal (supra) dated 1.5.2015, we find, on identical issue, Tribunal dismissed Revenue s appeal and upheld decision of CIT (A) vide para 2.1 of its order. Considering significance of said para 2.1 of Tribunal s order (supra) and for sake of completeness of this order, same is extracted as under: 2.1. We have considered submissions of Ld DR and perused material available on record. facts, in brief are that assessee is in business of retails in electronic goods, kitchen appliances, computers, laptops and related accessories through dedicated outlets called Croma . assessee declared loss of Rs. 85,33,61,594/- in its return filed on 29.9.2009. Ld AO during assessment proceedings asked assessee to show cause as to why payments of charges to banks in respect of sales effected through card mechanism should not be subjected to TDS u/s 194H of Act. assessee vide communication dated 15.12.2011 explained that provisions of section 194H of Act will be attracted only when one person acts on behalf of another, thereby, creating principle and agent relationship and further in instant case, sale is conducted by assessee on its own and not through bank and further transaction may termed as credit card MSF charges but in charges, cheque book request charges, etc. Ld AO completed assessment disallowing expenditure of Rs. 5,02,36,000/- incurred on account of payment of processing charges to HDFC bank on total amount swiped through customer credit card and expenditure of Rs. 49,02,000/- on account of various other bank charges (Cash Management Services) u/s 40(a)(ia) of Act. According to Ld AO, tax should have been deducted at source u/s 194 of Act. On appeal, Ld CIT (A) examined facts and following decision in case of Ahmedabad Stamp Vendors Association 3 vs. UOI (257 ITR 202) and Tata Tele Services Ltd vs. DCIT (TDS) decision from Bangalore Bench (ITA Nos.308 to 310 and 393 to 396) order dated 27/11/2012, wherein, it was held that there is no requirement of making TDS on commission retained by Card Companies, opined that provisions of section 40(a)(ia) r.w.s 194H of Act are not applicable, deleted addition. We find no infirmity in conclusion of Ld CIT (A) under facts available on record. His stand is affirmed. Finally, appeal of Revenue is dismissed. 6. Considering above settled nature of issue and also respectfully following decision of Tribunal for AY 2011-12 and also following principles of consistency, we are of opinion, decision taken by CIT (A) is fair and reasonable and it does not call for any interference. Accordingly, grounds raised by Revenue are dismissed. 7. In result, appeal of Revenue is dismissed. Order pronounced in open court on 23rd September, 2016. Sd/- Sd/- (RAVISH SOOD) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; 23.9.2016 OKK, Sr. PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5. ,DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Income-tax Officer (TDS)-2(4), Mumbai v. M/s. Nakshatra Jewellers Pvt Ltd