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ORDER Sanjiv Khanna, J. - This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 ('Act', for short) impugns the finding recorded by the Income Tax Appellate Tribunal ('Tribunal', for short) in their order dated 7th February, 2014 that the respondent-assessee, JDS Apparels Private Limited had not violated Section 194H of the Act. As a consequence, it has been held that the Assessing Officer was wrong in invoking Section 40(a)(ia) of the Act and accordingly had erred in making addition of Rs.44,65,654/-, i.e. the charges deducted by M/s HDFC Bank Ltd ('HDFC', for short) on the payments made through credit cards. 2. The respondent-assessee had for the Assessment Year 2009-10 filed a return on 30thNovember, 2009 declaring income of Rs.4,91,69,380/-, which was made subject matter of scrutiny assessment under Section 143(3) of the Act vide order dated 16th December, 2011. The assessment order records that the respondent-assessee was engaged in the business of trading in readymade garments. A letter was received from the Assessing Officer, TDS Circle Mumbai that the respondent-assessee had paid "commission" to HDFC on payments received from customers who had made purchases through credit cards. Survey under Section 133A of the Act had been conducted on HDFC, who had provided card swiping machines to retail merchants, including the respondent-assessee. A credit card holder could make payment by swiping the credit card on the said machines. The details of the bill amount, etc. were thereupon forwarded to the acquiring bank, which is the bank which had provided the machine, i.e. HDFC in this case, which then made payment to the respondent assessee. The payment made to the respondent-assessee was after withholding or deducting the fee payable to HDFC. Thereafter, the acquiring bank, i.e. HDFC recovered the bill amount from the issuing bank of the customer. 3. The Assessing Officer held that the amount earned by the acquiring bank, i.e. HDFC in this case, was in the nature of "commission" and should have been subjected to deduction of tax at source @ 10% under Section 194H of the Act. As the commission had not been subjected to tax at source,…

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