TaxTMI 
TaxTMI 
2012 (2) TMI 543
X X X X Extracts X X X X
X X X X Extracts X X X X
....sactions. 3. Brief facts of the case are that the assessee is having a showroom wherein the different customers mainly the foreign customers visits and purchase the precious and semi precious jewellery. These customers makes the payment to the assessee by different credit cards like Master card, visa Card, Diners Card, American Express Card etc. Various bankers are the processor and members of these cards. For this purpose they install an electric capture terminal at the premises of the assessee where the card is swapped. The assessee on receipt of credit card from its customers swaps the same on the electronic capture terminal after verification of all the details. On swapping the card, the swapping machine print out the credit slips. Thi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for making TDS u/s 194J. 4. The ld. CIT (A) in Para 6.3 to 6.10 (Page 16-23) of his order upheld the finding of the AO that the service fees/discount/merchant discount rate (MDR)/commission retained by the bank is payment of commission liable for deduction of tax at source u/s 194H. For this, she extensively quoted from the different terms of the contract entered by the assessee with various banks & held that bank represents the assessee & derives his power & authority to collect the money from the customer/customers bank & also to deal with the appropriate card association/card issuers & therefore the bank is acting as agent of assessee. However, she deleted the addition made by the AO in respect of service charges paid to American Expre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 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 floated by bank i.e. issuance of credit cards. Bank issues credit card to the various customers who purchase the various credit cards on ....