Appeal allowed on TDS paid for VISA license fees for AY 2015-16, case remanded for further examination

The appeal challenging the disallowance of TDS paid on license fees on VISA cards for Assessment Year 2015-16 was allowed for statistical purposes. The case was remanded to the CIT(A) for further examination to determine if the expenditure was reimbursable by VISA, impacting its deductibility. The Tribunal highlighted the variance between the terms of the Master Card and VISA card agreements, emphasizing the need to clarify the facts for a proper decision.

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Issues: Disallowance of TDS paid on license fees on VISA cards for Assessment Year 2015-16.

Analysis:
1. The appeal challenges the disallowance of TDS paid on license fees on VISA cards for Rs. 55.05 Lacs under the terms of agreement for Assessment Year 2015-16. The issue for consideration is the disallowance of TDS paid on license fees on VISA cards.

2. The Authorized Representative for Assessee submitted that the issue is in favor of the assessee based on previous Tribunal decisions. The Departmental Representative could not counter the fact that the Tribunal had already considered the issue in the assessee's favor in previous years. The CIT(A) distinguished the factual matrix for the current year.

3. The assessee claimed expenses towards non-reimbursable TDS for VISA Card and Mastercard during assessment under section 143(3). The Assessing Officer disallowed the expenses despite the assessee's defense based on favorable orders from previous years.

4. The assessee argued that agreements with VISA Card and Master Card obligated it to pay service charges & license fees without tax deduction. The CIT(A) differentiated between the two agreements, noting that the VISA card agreement did not clearly make tax payment the assessee's liability. The CIT(A) confirmed the disallowance of TDS on VISA cards but deleted the disallowance on Master Cards.

5. The Tribunal found the issue to be narrow, focusing on the variance between the terms of the Master Card and VISA card agreements. The agreement with VISA cards required proof of tax payment without specifying it as the assessee's liability. The Tribunal directed the CIT(A) to ascertain if the expenditure was reimbursable by VISA, which would impact its deductibility. The matter was remanded to clarify the facts for a proper decision.

6. The appeal was allowed for statistical purposes, and the case was sent back to the CIT(A) for further examination and clarification of facts regarding the reimbursability of the expenditure.

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