The Assessee is a Nationalized bank had filed original return of income which was revised subsequently. The Assessee’s case was selected for scrutiny and AO had made various disallowances including the disallowance under section 40a(ia) of the Act in respect of service charges paid to National Financial Switch and Cash Tree. Aggrieved by the said order, the Assessee preferred an appeal before the CIT(A) who partly allowed the appeal. Aggrieved by the same, the Revenue filed an appeal before the Tribunal. However, the Tribunal dismissed the appeal filed by the Revenue. On appeal to the High court, it held that section 194H would apply if the payment was received or is receivable directly or indirectly by a person acting on behalf of another person for services rendered, not being professional and for any services in the course of buying and selling of goods or in relation to any transaction relating to an asset, valuable article or thing. The relationship between the Assessee and the acquiring bank in case of credit card swiping transaction is not of an agency but that of two independent basis and on principal-principal basis. In the present case, even assuming that the transaction was being routed to National Financial Switch and Cash Tree, then also it is pertinent to mention here that the same is a consortium of banks and no commission or brokerage is paid to it. Thus, it does not act as an agent for collecting charges. Therefore, relying on Hon’ble Delhi High Court decision in case of JDS Apparels (P.) Ltd. (2015) 370 ITR 454 (Delhi)( HC) held that provisions of section 194H of the Act were not attracted in the present case and thus dismissed the Revenue’s appeal. (ITA No. 427 of 2015, dt. 23-11-2020) (AY. 2011-12)