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2019 (6) TMI 45 - AT - Income TaxAddition of TDS recoverable written off as bad debts U/s 36(1)(vii) - HELD THAT:- When assessee has duly shown the amount on account of TDS recoverable in the profit and loss account which fact has otherwise not been disputed by the AO and pertains to the earlier years, we are of the considered view that the issue is required to be remanded back to the AO to decide afresh after providing an opportunity of being heard to the assessee. Ground No.1 is determined in favour of the assessee for statistical purposes. Addition on account of security deposit rent written off u/s 37(1) - HELD THAT:- When it is not in dispute that 100 properties were taken on rent by the assessee to carry out its business out of which 30 properties have been vacated but assessee claimed to have not got the refund of security deposit, the same is allowable revenue expenditure lost in the ordinary course of business. AO has not questioned the books of account maintained by the assessee. So, CIT (A) has erred in confirming the addition which is not sustainable in the eyes of law hence it is ordered to be deleted subject to verification by the AO. Consequently, Ground No.2 is determined in favour of the assessee. Addition on account of advance given by the assessee to M/s. Centrum Direct Ltd. and written off as bad debt u/s 37(1) - HELD THAT:- when assessee proved to have advanced the amount during the ordinary course of its business and books of account have not been disputed and due to non-availing of the services, the advance amount was not refunded, it certainly amounts to bad debt. Assessee has duly produced ledger account entry of sales and also showing debt entries during the assessment proceedings but ld. CIT (A) has confirmed the addition without deciding the issue in controversy. So this issue also requires to be remanded back to the AO to decide afresh after examining the documents relied upon by the assessee. Consequently, Ground No.3 is determined in favour of the assessee for statistical purposes. Disallowance of unrealized amount given for services to M/s. Easy Link on the ground that this debt does not form part of the previous year or earlier year - HELD THAT:- Undisputedly, the amount was advanced by the assessee to M/s. Easy Link against hire charges and electricity charges but on closer of its Bombay branch, the said amount was forfeited by M/s. Easy Link and consequently the same was written off as on 31.03.2009. When the amount advanced by the assessee on account of security deposit was forfeited by the owner having been given in the ordinary course of business. Certainly it was incidental to the business and on business loss it is eligible for writing off as bad debt. Consequently, addition confirmed by the ld. CIT (A) is not sustainable in the eyes of law, hence ordered to be deleted. - Decided on favour of assessee.
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