Dismissing the appeal of the revenue the Court held that, payment gateway charges paid to a bank for swiping credit cards are in the nature of fees for banking services and not “commission” or “brokerage”. Accordingly, no TDS is deductible from the said charges u/s 194H and no disallowance u/s 40(a)(ia) can be made (CIT v.JDS Apparels (P) Ltd (2015) 370 ITR 454 (Delhi)(HC) followed). (ITA 136/2019, dt. 25.03.2019) (AY. 2009 -10)
PCIT v. Make My Trip India Pvt. Ltd( 2019) 263 Taxman 271/ 178 DTR 106 / 308 CTR 833 (Delhi)(HC), www.itatonline.org
S. 40(a)(ia) : Amounts not deductible-Deduction at source– Payment gateway charges paid to a bank for swiping credit cards are in the nature of fees for banking services and not “commission” or “brokerage”-Not liable to deduct tax at source- No disallowances can be made.[S.194H, 195(3)]