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TMI Blog2015 (5) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... nder expenditure u/s 69C of the Act 68,941 A. Additions on account of Gross Receipts - R21,20,714/- Shri Gunjan Nikhil Chandna 2. The Ld. CIT(A) erred in upholding the action of the A.O. in making addition of R21,20,714/- by alleging that the same has been accrued to the Appellant from M/s. Standard Chartered STCI Capital Markets Ltd. The addition of Rs. 21,20,714/- is not at all justified and the same may be deleted. 3. The Ld. CIT(A) failed to appreciate that the amount of Rs. 21,20,714/- has been retained by M/s. Standard Chartered - STCI Capital Markets Ltd for non clearance of dues by various clients registered through the Appellant. The Appellant, therefore prays that the addition of Rs. 21,20,714/- is not at all justified and hence, the same may be deleted. 4. Without prejudice to the above, the Ld. CIT(A) failed to appreciate that the amount of R21,20,714/- retained by M/s. Standard Chartered-STCI Capital Markets Ltd is irrecoverable. The Appellant, therefore, prays that the same may be allowed as bad debt. 5. Without prejudice to the above, the Ld. CIT(A) failed to appreciate that the amount of R21,20,714/- retained by M/ s. Standard Chartered-STCI Capital Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of R40,000/- under Section 40(a)(ia) is not at all justified and the same may be deleted. E. Addition on account of unexplained cash credit under Section 68 of the Act - Rs. 31,427/- 12. The Ld. CIT(A) erred in confirming the action of the AO in making addition of R31,427/- treating the same as unexplained cash credit under the provisions of Section 68 of the Act without appreciating the facts and circumstances of the case. The Appellant prays that the addition of R31,427/- is not at all justified and hence, the same may be deleted. F. Addition on account of unexplained expenditure under Section 69C of the Act-Rs 68,941/- 13. The Ld. CIT(A) erred in confirming the action of the AO in making an addition of Rs. 68,427/- treating the same as unexplained expenditure under the provisions of Section 690 of the Act without appreciating the facts and circumstances of the case. The Appellant prays that the addition of Rs. 68,941/- is not at all justified and hence, the same may be deleted. 14. The Appellant denies any liability to pay interest under Section 234A, 234B and 2340 of the Act. Hence, the same are not leviable. 15. The Appellant craves leave to add, alter, resc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax in the current year. The AR submitted that being a sub broker, the assessee had entered into Booking Franchise Agreement dated 02.12.2003 between UTI Securities Ltd. (Now Standard Chartered Securities (India) Ltd.) and Mr. Gunjan N Thakkar (assessee), wherein clause 6 pertained to obligations of Franchisee and sub clause 6.4 reads as under "6. immediately on signing of the agreement to register himself/herself/itself with NSF and BSE as sub-broker by completing all necessary formalities and by complying all necessary legal. and operational formalities as required by the Franchisors. 6.2 that the entire cost of the hardware involved such as computers cabling, furniture and fittings required at the Franchisee Centre etc. as well as maintenance of the same and other costs, charges and expenses shall be borne by the Franchisee 6.3 to bear and pay all recurring costs continue the inflow of exchange Feeds from the Exchanges and other recurring costs like exchange charges, office expenses, rent, water and electrical charges etc. 6.4 Franchisee shall ensure full compliance of margin collections from clients, as may be imposed by the regulatory authorities and Franchisor fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention money withheld by contractee pending completion of contract work does not accrue to the assessee-contractor in the year in which the amount is retained". 15. The AR therefore submitted that the money/brokerage held back by the franchisor cannot be taken to be the income of the year, as has been held by the Hon'ble Bombay High Court. 16. The DR relied on the orders of the revenue authorities and submitted that the sum was rightly brought to tax. 17. We have heard the facts of the case and have perused the agreement and the case law as cited by the AR. 18. At the outset, we agree with the revenue authorities that since the amount became due and/or accrued to the assessee, the income has emerged and therefore had to be taken as income of the assessee. The case cited by the AR has different facts, and till then it would remain contingent. But in the case in hand, the work was completed and it was the assessee who failed to have a proper collection from her clients to be paid to SC-STCI, on this default by the assessee, the amount though due was not paid to her, therefore, it was her income and the revenue authorities have correctly brought the same tax. As a result, we sust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 42,28,330/- has not been disputed or disturbed by the revenue authorities. It is also a fact that as per the AO, the assessee would have received income from brokerage at Rs. 67,33,211/-, but declared only Rs. 42,28,330/- which was actually received. To earn that much brokerage, the assessee who in the business must have paid the commission to her brokers/agents and also employed certain staff. On the other hand, the revenue authorities have disallowed the payment of commission u/s 40(a)(ia), which patently means that the assessee has paid the commission and has paid salary to her employee as well. 33. Since the revenue authorities have disallowed the payments of Rs. 4,08,872/- and Rs. 13,08,872/-, for non-deduction of TAS, the issue has created a major block to come to a logical conclusion. 34. In these circumstances, we are of the opinion that these issues need to be adjudicated afresh in line with legal provisions of section 40(a)(ia). 35. We, therefore set aside the order of the revenue authorities on the payments of Rs. 40,000/- and direct the AO to examine the deduction of TAS and if the contentions of the assessee are correct, allow the expense. 36. Grounds no. C8 & C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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