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2015 (5) TMI 540 - ITAT MUMBAI

2015 (5) TMI 540 - ITAT MUMBAI - TMI - Additions on account of Gross Receipts - CIT(A) confirmed addition alleging that the same has been accrued to the Appellant from M/s. Standard Chartered STCI Capital Markets Ltd. - Held that:- 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 contingen .....

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ourse of business of the Appellant? - Held that:- The assessee actually suffered loss, not only from the clients, who did not honour their commitments, but from her principal, i.e. SC-STCI, as well who did not pay her in line of their receipts from business and as per clause 6.15. We, therefore, hold that it was a business loss for the year under consideration.We, therefore, direct the revenue authorities to allow ₹ 21,20,714/- as business loss and consequential benefits attached to it. - .....

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exact finding of fact. We, therefore, set aside the orders of the revenue authorities on this issue and direct the AO to adjudicate afresh. - Decided in favour of assessee for statistical purposes.

Disallowance of commission paid - Held that:- The fact that the assessee was in business and has shown brokerage received at ₹ 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 .....

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ed the payments of ₹ 4,08,872/- and ₹ 13,08,872/-, for non-deduction of TAS, the issue has created a major block to come to a logical conclusion. Thus isssues need to be adjudicated afresh in line with legal provisions of section 40(a)(ia).- Decided in favour of assessee for statistical purposes.

Addition on account of unexplained cash credit & unexplained expenditure - Held that:- We have not been able to find out as to how the two figures were derived by the AO. In such .....

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3, Mumbai, dated 24.01.2011, raising the following grounds: The Ld. Commissioner of Income Tax (Appeals) [hereinafter referred to as 'Ld. CIT(A)] erred in passing the order dated 24.01.2011 confirming the Assessment Order passed under Section 143(3) of the I.T. Act, 1961 without appreciating the facts and circumstances of the case. The Appellant objects to the following additions/ disallowances made in the Assessment Order: Sr. No. Particulars Amount (Rs.) A Additions on account of Gross Rec .....

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eging that the same has been accrued to the Appellant from M/s. Standard Chartered STCI Capital Markets Ltd. The addition of ₹ 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 ₹ 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 ₹ 21,20,714/- i .....

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y the Appellant in the course of business of the Appellant. The Appellant, therefore, prays that the same may be allowed as business loss. B. Disallowance on account of Bad Debts- R 6,13,413/- 6. The Ld. CIT(A) erred in confirming the action of the AO in disallowing the bad debts claimed amounting to ₹ 6,13,413/- without appreciating the fact that the same has become irrecoverable. The Appellant therefore prays that the disallowance of bad debt amounting to ₹ 6,13,413/- is not at all .....

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mmission paid during the impugned assessment year without appreciating the facts and circumstances of the case. The Appellant, therefore, prays that the disallowance of commission paid amounting to ₹ 4,08,872/- is not at all justified and the same may be deleted. 9. The Ld. CIT(A) erred in directing the Ld. A.O. to disallow entire amount of R13,08,872/- u/s.40(a)(ia) without appreciating the fact that the Appellant has deducted TDS on the commission and paid the same before the due date of .....

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ot at all justified and hence, the same may be deleted. 11. The Ld. CIT(A) failed to appreciate that the amount of R40,000/- represents the payment made to the Mr. R. Shri Gunjan Nikhil Chandna Vishwanathan one of the employee of the Appellant. The Appellant therefore prays that the provisions of Section 40(a)(ia) is not at all attracted to the facts of the Appellant's case. Hence, the disallowance of R40,000/- under Section 40(a)(ia) is not at all justified and the same may be deleted. E. A .....

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nder 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 ₹ 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 ₹ 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 23 .....

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essee submitted her TDS certificates from TDS certificate, the AO came to a conclusion that the assessee return over should have been ₹ 67,33,211/- and not ₹ 46,12,513/- (Rs. 46,41,123-Rs. 28,610). 5. He, therefore, asked the assessee for the reasons of difference. The assessee explained vide letter dated 23.11.2009 that the assessee did not declare ₹ 21,20,714/-, as that was the retention money, retained by STCI Capital Markets Ltd., because the assessee was unable to collect .....

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s made before the AO. The assessee also submitted month wise details of commission received from STCI and submitted that the she had declared what was actually received by her. 8. The CIT(A) also rejected the claim as made by the assessee and sustained the order of the AO. 9. Aggrieved by the order of the CIT(A), the assessee is now before the ITAT. 10. Before us, the AR submitted that the factum and quantum of actual money received by the assessee is not disputed. The dispute is with regard to .....

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to be brought 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 .....

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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 from time to time . 12. Clause 18 specifies Indemnity The Franchisee hereby agrees to fully and effectively indemnify and keep indemnified and hold harmless the Franchisor against all proceedings, costs, claims, damages and expenses (including counsel s fees and other legal expenses) of whatsoever .....

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SEBI (Stock-brokers and Sub-brokers) (Amendment) Regulations, 2003 considered it necessary to amend the above agreement in the manner as hereinafter appearing . 14. Clause 6.15 of the Amendment Agreement read as, To make good to Franchisor, the defaults made by clients introduced by or doing business through the Franchisee upon demand in that behalf made by the Franchisor and until the Franchisee pays such amounts or causes the clients to pay such amounts, the Franchisor may, without prejudice .....

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h of Franchisor s obligations hereunder . Under these circumstances, the AR submitted that neither the due amounts were recovered nor were they recoverable from clients. On these grounds, the Franchisor forfeited the payment that was due to the assessee. The AR submitted that the assessee had shown the income which has actually resulted in income to her. In so far as the exclusion of retention money was concerned, he placed reliance on the decision of Hon ble Bombay High Court in the case of CIT .....

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mitted 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 .....

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our their commitments, but from her principal, i.e. SC-STCI, as well who did not pay her in line of their receipts from business and as per clause 6.15. We, therefore, hold that it was a business loss for the year under consideration. 21. We, therefore, direct the revenue authorities to allow ₹ 21,20,714/- as business loss and consequential benefits attached to it. 22. Ground no. B5 is therefore allowed. 23. Ground no. B6 pertains to claim of ₹ 6,13,413/- as bad debt. 24. The claim o .....

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irst the assessee is to show the bad debt as income due. Unless the income is not shown, the bad debt cannot be claimed. Since the assessee has shown the amounts irrecoverable from clients during the year itself, cannot amount to bad debt. 28. We have heard the arguments and have perused the orders of the revenue authorities. We find that the issue in question is exactly the same was that in Ground no. A 1, 2, 3 & 4. But neither the assessee nor the DR has made any attempt either to reconcil .....

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rtly linked to ground No. A, but here the dispute pertains to payment of commission by the assessee to its constituents. 32. The fact that the assessee was in business and has shown brokerage received at ₹ 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 ₹ 67,33,211/-, but declared only ₹ 42,28,330/- which was actually received. To earn that much brokerage, .....

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