TMI Blog2012 (5) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... ses ₹ 32,657/- iv)Addition on a/c of sampling expenses ₹ 48,075/- v)Disallowance on a/c. of conveyance, repair ₹ 90,000/- maint. And staff welfare expenses. vi)Disallowance on a/c. of depreciation on car, ₹ 90,000/- insurance, repair and maintenance and telephone expenses. 2. On appeal, Learned CIT(Appeals) has deleted the additions mentioned at Sr. Nos.1 and 4. She confirmed the additions at Sr. Nos. 2, 3, 5 6. The revenue in its appeal has not taken the ground in consonance with Rule 8 of the ITAT's Rules, they are descriptive and argumentative in nature. However, in brief, it is challenging the deletion of addition of ₹ 45,03,927 mentioned at Sr. No.1. On the other hand, assessee is challenging confirmation of additions by the Learned CIT(Appeals) at Sr. Nos. 2, 3, 5 6 of the table extracted supra. 3. With the assistance of learned representatives, we have gone through the record carefully. With regard to the solitary issue involved in the appeal of the revenue, the facts are that on scrutiny of the accounts, it revealed to the Assessing Officer that the assessee had debited a sum of ₹ 45,03,927 under the head expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while interacted with the assessee. The assessee immediately reported the matter to the police on 20.7.2006. He filed a complaint to the Embassy of Spain. He requested the bank to freezer his account on 9.6.2008. He wrote to the Chief Minister of Haryana for transferring the case to the Central Bureau of Investigation. He filed a criminal miscellaneous petition under section 482 of the Cr.PC seeking a direction that FIR be registered and investigation be made. On the strength of all these documents, assessee claimed this amount as a loss in business. However, learned Assessing Officer did not accept the contention of the assessee. He pointed out that assessee has not furnished the details of goods/raw-material purchased from the person to whom the advances were given. He also observed that it is not understandable as to why the UNICEF, who has to purchase the goods from the assessee demanding advances and the assessee who had to supply the goods against order sent money as advance against his sales. In the understanding of the Assessing Officer, assessee is a vendor, the advance ought to have been made by the UNICEF for procuring the material from the assessee. The advances were gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and locked funds insurance. Learned First Appellate Authority has rightly appreciated the facts and observed that these remittance do not contain the components of taxable income in India which would put an obligation upon the assessee to deduct the tax before remitting those amounts. After considering the findings of the Learned First Appellate Authority, in paragraph NO.4.10 to 4.13, we do not find any force in the appeal of the revenue. We are in full agreement with the conclusions of the Learned First Appellate Authority on this issue. Accordingly, the appeal of the revenue is dismissed. 7. In the assessee s appeal, the first grievance of the assessee is that the Learned CIT(Appeals) has erred in confirming the disallowance of ₹ 5 lacs. The brief facts of the case are that assessee has paid a sum of ₹ 5 lacs to M/s. VV Industires for taking on rent the factory premises, namely, Plot No.295, Sector 6, IMT, Manesar, Gurgaon. This premises was to be taken on lease for manufacturing of quilt etc. for export as per the export order. The assessee was to pay a refundable security of ₹ 10 lacs. He has paid ₹ 5 lacs. Since the fraud has been played upon him, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. There is no dispute that the amount paid by the assessee was a refundable security. The only dispute raised by the Assessing Officer is that the assessee failed to deduct the TDS. Learned First Appellate Authority confirmed the disallowance on the ground that it is capital expenditure. We are of the view that a refundable security was adjusted towards rent in peculiar facts and circumstances. When assessee made the payment of refundable security, as per circular, he was not supposed to deduct the tax at source. The security was paid in order to cover such type of unforeseen circumstances. The landlord has forfeited it and adjusted it towards the rent, thus, it was a revenue expenditure in the hands of the assessee and it did not deserve to be disallowed. We allow this ground of appeal and delete the disallowance. 12. In the next ground of appeal, grievance of the assessee is that Learned CIT(Appeals) has erred in confirming the addition of ₹ 32,657. The assessee has purchased certain items but failed to disclose them in the closing stock. Assessing Officer has made the addition on the ground that they should reflect in the closing stock unless and until they are sold. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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