TaxTMI 
TaxTMI 
2014 (3) TMI 59
X X X X Extracts X X X X
X X X X Extracts X X X X
.... order of Commissioner of Income Tax(A), therefore, we have clubbed both and these are being adjudicated by this consolidated order. 2. First of all, we take up the appeal of the revenue wherein sole ground reads as under:- "On the facts and in the circumstances of the case, the ld. CIT(A) has erred in law and facts in deleting the addition of Rs.28,48,246 made by Assessing Officer on account of non compliance of provisions of section 194-H without appreciating the facts discussed in detail in assessment order and remand report submitted by Assessing Officer and accepting the additional evidence produced by assessee during appellate proceedings without confronting the same to the Assessing Officer." 3. Apropos th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessee submitted that a customer willing to purchase automobile or vehicle approaches the assessee for arranging vehicle loan from HDFC Bank and after taking the necessary documents and verifying the same, the assessee forwards the case to HDFC Bank for sanction of loan and after sanctioning of the loan by HDFC Bank, the amount is disbursed by HDFC Bank directly to the dealer of the vehicle. The counsel further pointed out that for getting the customers and undertaking due diligence and loan and repayment responsibilities, HDFC Bank pays commission to the assessee directly. The counsel further pointed out that in order to attract customers and to improve business, the assessee passes on part of the commission to the customer by direc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d has submitted the detailed remand report to the Commissioner of Income Tax(A). In this situation, we are unable to accept this legal contention of the revenue that the Commissioner of Income Tax(A) accepted the additional evidence produced by the assessee during the appellate proceedings without confronting the same to the Assessing Officer. Under these circumstances, we are of the view that the Commissioner of Income Tax(A) admitted additional evidence submitted by the assessee by following due procedure as stipulated in Rule 46A of the Income Tax Rules, 1962. Thus, legal contention of the revenue is rejected in this regard. 5. Coming to the issue of deletion of addition made by the Assessing Officer on account of non-compliance of pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed supra. In these circumstances, I have no other alterative, but to make an addition of Rs. 28,48,246/- to the already assessed income of Rs. 2,79,540/- under section 40a(ia) as the assessee failed to comply the provisions of section 194B by not deducting the tax on said payments." 6. On the other hand, from the impugned order, we also observe that the Commissioner of Income Tax(A) has granted relief to the assessee with following observations and findings:- "7. I have considered the issue and the submissions made by the AR. The assessee is a DMA of HDFC Bank for arranging finance to old and new process and documentation for arranging the finance is as under:- A custome....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perhaps the Assessing Officer was confused between payment of commission and grant of discount or rebate. On specific query from the Bench, the DR accepted that in view of the process and documentation for arranging finance for the customer, the assessee was providing services to the HDFC Bank by processing loan cases for the vehicle customers and for the safety of the loan amount, the cheques of the loan amount were issued by HDFC Bank directly in the name of proposed vehicle dealer. Further, we also observe that from the arrangement and process of sanctioning of loan and disbursement, we find that there was no occasion to pay any commission to the vehicle dealers by the assessee because the vehicle dealers are not providing any services t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessee. At the cost of repetition, we hold that there was no occasion for the assessee to make payment of commission to the vehicle dealers who are getting business by the assessee, therefore, the payment made by the assessee in the form of cheques through vehicle dealers to the customers is a grant of rebate and discount. Hence, the assessee was not under any obligation to comply with the provisions of section 194H of the Act and in this situation, the Assessing Officer wrongly invoked the provisions of section 40a(ia) of the Act. Accordingly, sole ground of the revenue being devoid of merits is dismissed. Cross Objections of the assessee 9. We also heard rival arguments of both the parties on cross objection. The counsel of th....