TaxTMI 
TaxTMI 
2014 (7) TMI 1152
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....f I.T. Act, 1961 and thereby upholding disallowance of such charges amounting to Rs. 788442/- U/s 40(a)(ia) for non deduction of TDS therefrom." 2. The sole ground of Revenue's appeal is against deleting the addition of Rs. 30,68,164/- made by the Assessing Officer on account of excess depreciation claimed by the assessee on wind mill plant. The assessee is running hotels, restaurant, bar and shopping complex. During the year under consideration, the assessee has installed wind mill at village Saadiya, district- Jaisalmer, Rajasthan of Rs. 3,66,33,382/-. The assessee gave the details and breakup of the entire plant of wind mill, which was reproduced by the Assessing Officer on pages 2 and 3. The expenditure is ranging from wind mill machines to land leasing charges. The Assessing Officer raised the question whether all these different nature of expenditures are entitled for depreciation at the rate specified only for wind mill. However, the assessee clubbed all the items of expenditure under the head wind mill and claimed depreciation @ 80%. The items narrating in chart-A mentioned on pages 2 and 3 of assessment order, it was found by the Assessing Officer that they are acc....
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....rned CIT(A), who has allowed the appeal by observing as under:- "I have carefully perused the order and the submissions of the AR. The Hon'ble ITAT, Jaipur Bench has already adjudicated upon the above issue in the case of M/s Chiras Associates P. Ltd. in its order ITA No. 1632/JP/2008 A.Y. 2005-06 dt. 26/2/2010. They have relied on the finding of the Hon'ble M.P. High Court in the case of DCIT Vs. Vippy Solvex Products Pvt. Ltd. 164 Taxman 483 and have observed that for the purpose of setting up of a wind mill "the foundation of platform, erection, installation of plant and machinery, preparation of crane platform for windmill and other and other civil work carried out for installation are integral part of the windmill which have no independent use. Thus the same are entitled to claim depreciation @ 80%." 4. Now the Revenue is in appeal before us and the learned D.R. supported the order of the learned Assessing Officer. 5. At the outset, the learned A.R. for the assessee argued that this issue is covered in favour of the assessee by the Hon'ble ITAT, Jaipur Bench, Jaipur in ITA No. 1632/JP/2008 for A.Y. 2005-06 order dated 26/2/2010. The learned A.R. further....
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....ssociates (P) Ltd. respectively, held that foundation of platform, erection, installation of plant and machinery, preparation of crane platform for wind mill and other civil work carried out for installation are internal part of wind mill, which have not independent use. Thus, we are of the considered view that the assessee is entitled for 80% of depreciation on composite wind mill project including other expenditure for put to use for wind mill. Thus, we confirm the order of learned CIT(A). 7. The assessee challenged the confirmation of commission payment to the bank on credit card is covered U/s 194 of the Act as for TDS and disallowed charges of Rs. 7,88,442/- U/s 40(a)(ia) of the Act. The Assessing Officer observed that the assessee had paid credit card commission of Rs. 7,88,442/-. The assessee had not deducted TDS on it. The charges were commission in respect of credit card as per Section 194 of the Act as the assessee has not deducted TDS on Rs. 7,88,242/-. Therefore, the learned Assessing Officer gave reasonable opportunity of being heard on this issue after considering the assessee's reply, hold that the assessee's payment to the bank covered under Explanation of S....
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....ian Contract Act reads as under: "An agent is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom said act is done, or who is o represented, is called the principal." Thus an agency comes into existence where one person is vested with the authority or capacity to create a legal relationship between persons referred to as a principal in this case the assessee (merchant) and outside third party i.e. the card holder. This legal relationship of a principal and agent between the assessee and the bank was created as per terms of a written contract. The above observations are based upon the terms and conditions of the agreement between the different banks and the assessee filed before me and extracted in detail in the main body of the order above. 5.12. Therefore, I hold that the commission paid by the assessee to the bank falls firmly under the purview of the Explanation of Section 194H for payment received or receivable directly by a person (in this case the banks) acting on behalf of another person (assessee) for services rendered in relation to collection of payment from the card holde....
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....of food and beverages. The customers paid this service through credit cards, which is credited by the bank of credit card holders. The concerned bank transfers this money after charging of fees. It is fact that these services were rendered by the bank of credit card holders not by the bank of assessee. The appellant gets remaining amount after deducting the fees. The Coordinate 'A' Bench of the ITAT, Jaipur in the case of Gems Paradise Vs. ACIT held similar identical issues as under:- "27. After considering the orders of the AO and ld. CIT (A), we find that assessee deserves to succeed in this regard. Section 194H is applicable where any commission has been paid by the Principal to the commission agent. This is not a case of commission agent as assessee sold its goods through credit card and on presentation of bill issued against credit card, the bank makes payment to the assessee after deducting agreed fees as per terms and conditions in case of credit card. This is not a commission payment but a fees deducted by the bank. If there is an agreement, that is agreement between the credit cardholder and the bank. Bank is a Principal and to spread over its business, a scheme is....