TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 1775
X X X X Extracts X X X X
X X X X Extracts X X X X
....mer can log in to the above website from anywhere, choose from various travel products displayed on the website and make a transaction on line. For such transaction undertaken payment is made by the customer using the facility of an Internet Payment Gateway (payment gateway). Once a travel product is selected, the customer is directed to the secure payment gateway of banks which provide this facility of making payment through internet. The payment gateways are secured websites and are used by e-Commerce companies like assessee for the purpose of automatic and instant fund settlement of any transaction authenticated and authorised by VISA and Master Cards. The transaction is authorised by VISA / Master Card to ensure that the customer, while using his credit card on the payment gateway has sufficient credit limit to purchase the product. In other words, payment gateway website provides the facility for secure fund settlement in e-Commerce transaction electronically, automatically, instantly, round the clock, without involving manual intervention and as system driven transaction. In the nut-shell, the website of the assessee automatically opens for payment gateway as soon as the cust....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng on behalf of other persons for :- (i) services rendered (not being professional charges) in the course of buying or selling of goods or (ii) in relation to any transaction relating to any asset, valuable article or things, not being securities. The assessee, therefore, submitted that if the payment is made by one principal to another principal, then it would not be in the nature of commission. The detailed submissions of the assessee are noted in the impugned order along with case laws on which assessee relied upon along with the issue of notification under section 197A of the Income Tax Act by the Government of India. The assessee, therefore, pleaded that section 194H of the I. T. Act would not apply in the case of assessee because there is no transaction of commission or brokerage. The assessee also submitted that American Express Bank Ltd. and Citi Bank have issued 'NIL' TDS certificate under section 195(3) of the Act by the DDIT, Mumbai and copies of the same were placed before AO. As per certificate, these banks can receive payment of interest and other sum without any TDS. The assessee submitted that in any view of the matter, payment gateway charges of Rs. 1,39,75,886/- p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ced as under :- " 6. The Assessing Officer levied interest under section 201(1A) and raised demand of Rs. 11,36,600/- in the assessment year 2010-11 and Rs. 20,29,758/- in the assessment year 2011-12 on account of default under section 201(1) for non-deduction of tax on payment of gateway charges retained/paid to bank under section 194H of the Act and in consequence also charged interest under section 201(1A). The ld. CIT (Appeals) has also deleted the addition made on account of default on account of provisions made in the books of account, because as per the appellant, TDS has to be made on payment or credit whichever is earlier. The ld. CIT (Appeals) has deleted these demands, which have been questioned by the Revenue. 7. At the outset of hearing, the ld. AR pointed out that the issue raised is fully covered by the decision of Hon'ble jurisdictional High Court of Delhi in the case of CIT Vs. J.D.S. Apparels Pvt. Ltd., Income Tax Appeal No. 608/2014 dated 18.11.2014. He submitted that gateway charges incurred is neither commission nor brokerage and with this observation the Hon'ble jurisdictional High Court has decided the issue in favour of the assessee in the above cited de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....resentative of the payer being the principal. If the payment is made by one principal to another principal, as in the present case, then it would not be in the nature of commission. The Hon'ble jurisdictional High Court of Delhi in the case of the CIT Vs. J.D.S. Apparels Pvt. Ltd. (supra) has decided the issue in favour of the assessee. The relevant finding given in para Nos. 15 and 16 are being reproduced hereunder :- " 15. Applying the above cited case law to the factual matrix of the present case, we feel that Section 194H of the Act would not be attracted. HDFC was not acting as an agent of the respondent-assessee. Once the payment was made by HDFC, it was received and credited to the account of the respondent-assessee. In the process, a small fee was deducted by the acquiring bank, i.e. the bank whose swiping machine was used. On swiping the credit card on the swiping machine, the customer whose credit card was used, got access to the internet gateway of the acquiring bank resulting in the realisation of payment. Subsequently, the acquiring bank realised and recovered the payment from the bank which had issued the credit card. HDFC had not undertaken any act on "behalf" of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of buying or selling of goods as the banker does not render any service in the nature of agency. " In view of above decision and the decisions cited by the assessee before the ld. CIT (Appeals), I am of the view that the ld. CIT (Appeals) has rightly held that the provisions of section 194H of the Act are not applicable in the present case and thus, the assessee was not in default under section 201(1) on account of gateway payment charges and hence levy of interest under section 201(1A) of the Act by the Assessing Officer was not justified. He thus has rightly deleted the additions made on account of default under section 201(1) of the Act and interest levied under section 201(1A) in consequent to the above default under section 201(1) of the Act in both the assessment years. The same are upheld. " 5. The learned CIT [DR], however, relied upon the orders of the authorities below. 6. On consideration of the rival submissions in the light of the earlier order of the Tribunal dated 30th January, 2017 (supra) we find that this issue is already decided in favour of the assessee by the Tribunal following the decision of the Hon'ble Delhi High Court in the case of CIT Vs. JDS Apparels....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uter peripherals, which are subjected to depreciation @ 60%. However, the list includes certain items like digital call logger board and software protection, Nortel equipment, head-sets, and time attendance system. These items do not satisfy the criterion of the computer peripherals as enunciated by various judicial authorities. Hence, these items are subject to depreciation like plant and machinery. This issue was partly allowed in favour of the assessee. 11. After considering the rival submissions, we do not find any justification to interfere with the order of the learned CIT (Appeals). New Appendix 1, applicable to assessment year under appeal, Income Tax Rules in Part III(5) provides depreciation @ 60% on computers including computer software. Notes 7 below the table provides "Computer software" means any computer program recorded on any disc, tape, perforated media or other information storage device, as follows :- " 1[NEW APPENDIX I [Effective from assessment year 2006-07 onwards] [See rule 5] TABLE OF RATES AT WHICH DEPRECIATION IS ADMISSIBLE Block of assets ............ ............ ............ I. Building [See Notes 1 to 4 below this Table] ............ .........