2019 (4) TMI 1317

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....he amount withheld by the banks/credit card agency as service charges in respect of credit card services provided ?" 2. Learned Counsel for the Revenue submitted that the issue has been admitted by this Court in several appeals. He drew our attention to some such admission orders. On the other hand, learned Counsel for the Assessee drew our attention to an order dated 18th December, 2018 passed in Income Tax Appeal No.847 of 2016 and connected Appeal to contend that by a detailed order, such a question has been rejected by the High Court. In response to this, the learned Counsel for the Revenue submitted that the order of rejection of the Revenue's Appeal was passed without taking note of several other admitted Appeals on the issue. 3....

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....ns. The Assessing Officer disallowed the corresponding expenditure of Rs. 1,96,68,165/­ by invoking to Section 40(a)(ia) of the Act. In Appeal, the Commissioner of Income Tax [Appeals] (for short "CIT[A]), deleted disallowance, upon which the Revenue approached the Tribunal. The Tribunal by the impugned Judgment, dismissed the Revenue's Appeal, relying upon its Judgment in case of the Assessee for the earlier Assessment Year. In such Judgment, the Tribunal had relied upon the decision of the Delhi High Court in the case of CIT v/s. JDS Apparels P. Ltd., reported in 370 ITR 454. The Tribunal held that, in the present case, the bank did not act as an agent of the Assessee while processing the credit card payments and, therefore, the c....

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.... of the customer whose credit card was used in the swiping machines. It is noticeable that the bank in question or their employees were not present at the spot and were not associated with buying or selling of goods as such. Upon swiping the card, the bank made payment of the bill amount to the respondent­assessee. Thus, the respondent­assessee received the sale consideration. In turn, the bank in question had to collect the amount from the bankers of the credit card holder. The bank had taken the risk and also remained out of pocket for sometime as there would be a time gap between the date of payment and recovery of the amount paid. 16:­ The amount retained by the bank is a fee charged by them for having rendered the banking....