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2022 (9) TMI 878 - AT - Income TaxDisallowance of forfeited security deposit on leased premises - AO disallowed assessee’s claim on the ground that forfeiture of the security deposit cannot be considered as revenue expenditure and he disallowed the same as being capital expenditure - HELD THAT:- We find no infirmity in the order of the CIT(Appeals) who has correctly held that forfeiture of security deposit is normal business loss in the assessee’s line of business and the same is allowable as revenue expenditure in light of the decision in the case of Fab India Overseas Private Limited [2013 (9) TMI 301 - ITAT DELHI] Addition u/s 40(a)(ia) - assessee made payments to various Clearing and Forwarding agents for commission as well as towards reimbursement of expenditure - assessee had deducted TDS on commission part and no TDS was deducted on the reimbursement element - HELD THAT:- CIT(Appeals) has given relief in respect of non deduction of TDS for cases where (i) the agent had issued separate invoice for reimbursement expenditure (ii) relief was also granted in respect of cases where there was no requirement for TDS since falling within the limit of ₹ 20,000 (iii) when the payee was filing his return of income and had reflected the said receipts and his return of income. However, in such cases where the assessee could not file the relevant proof of the payee filing its return of income and reflecting such income in the return of income, CIT(Appeals) disallowed the same. In our considered view, we find no infirmity in the order of CIT(Appeals), either in facts or application of law. Addition on account of difference in stock statement - HELD THAT:- On a perusal of the records and on going through the order passed by the CIT(Appeals), we are of the considered view that the CIT(Appeals) has not erred in facts and in law in deleting the additions made by the AO. Addition on account of difference in balance sheet with supplier - HELD THAT:- We are of the considered view that in the instant facts CIT(Appeals) has not erred in facts and in law in granting relief the assessee. Merely because the supplier has not written back the amount in his books of account mainly because it was awaiting Form no. 18A would not vitiate the fact that the duty was not refundable to the 'appellant and ultimately it had to go to the profit and loss account. Addition of purchases - HELD THAT:- On perusal of the facts before us, it is observed that the assessee has been able to prove the genuineness of the transaction and has given substantial evidentiary proof to show that the assessee had made purchases from these two parties. Accordingly, we find no infirmity in the order of the CIT(Appeals), wherein on appreciation of facts, he allowed the assessee’s ground. Addition on account of discount given to supplier - HELD THAT:- No infirmity in the order of Ld. CIT(Appeals). In our view, income can be recognised by the assessee only when the same comes to the knowledge of the assessee. It is quite common in any line of business that the assessee cannot be expected to know about the discount unless the same is intimated to him. It is also observed that in the subsequent year i.e. AY 2006-07, the assessee recognised the discount in its books of accounts, when it came to know about the same. Accordingly, a find no infirmity in the order of CIT(Appeals). Addition for non-reflection of transaction the books of supplier - HELD THAT:- CIT(Appeals) allowed the assessee’s appeal on the ground that the assessee had made payment to M/s Gajjar fabrication through banking channels after deduction of TDS, and this fact was completely ignored by the AO while making the above aforesaid addition. The assessee has also produced invoices of the concerned party to whom job work payment was made. CIT(Appeals) allowed this ground of the assessee. Addition treating repairing expenditure as capital expenditure - HELD THAT:- No infirmity in the order of CIT(Appeals), who upon proper appreciation of the facts of the case, allowed the assessee’s appeal on this issue. The assessee had carried out minor repairs which are allowed by the CIT(A) on appreciation of proper evidence as revenue expenditure. No doubt has been casted on the genuineness of the expenditure.
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