TMI Blog2015 (5) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - Decided in favour of assesse. Payment of commission by the assessee to its constituents - non-deduction of TAS - Held that:- Since the revenue authorities have disallowed 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.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). Thus direct the AO to examine the deduction of TAS and if the contentions of the assessee are correct, allow the expense. - Decided in favour of assesse for statistical purposes. Unexplained cash credit u/s 68 & Unexplained expenditure u/s 69C - Held that:- We have not been able to find out as to how the two figures were derived by the AO. In such a circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 Markets Ltd is a loss suffered by 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 justified and the same may be deleted. 7. Without prejudice to the above, the Ld. CIT(A) failed to appreciate that the bad debts has been generated in the normal course of business activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 2340 of the Act. Hence, the same are not leviable. 15 . The Appellant craves leave to add, alter, rescind or amend any of the grounds of appeal . 2. The assessee is an individual, having sub broker business for UTI Securities Ltd (presently Standard Chartered -STCI Capital Markets Limited). 3. In the year under consideration, the assessee declared her declared her turnover at ₹ 46,41,123/- and income, after all expenses at ₹ 9.44 lacs. 4. In the course of assessment proceedings, the assessee 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 rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 nature howsoever suffered or incurred by the FRANCHISOR arising out of or by reason of any omission or commission of the Franchisee or its officers and other employees or authorized persons in carrying on the Business pursuant hereto . 13. The existing agreement was amended on 01.04.2004, which specified, (A) The F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 sustain the orders of the revenue authorities. 19. Ground no. A2, 3 4 are therefore rejected. 20. Coming to ground B5, we find 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. 21. We, therefore, direct the revenue authorities to allow ₹ 21,20,714/- as business loss and consequential benefits attached to it. 22. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commission and has paid salary to her employee as well. 33. Since the revenue authorities have disallowed 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. 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 ₹ 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 C9 D10 D11 are therefore allowed for statistical purposes. 37. Grounds no. E12 F13 pertain cash credit u/s 68 of ₹ 31,427/- and unexplained expenditure of ₹ 68,941/- u/s 69C. 38. From the recital of the assessment order, we are unable to find out as to how the AO reached these two figures from the details as provided by the assessee. The CIT(A) has also sustained the addition. 39. As mentioned above, we have not been able to find out as to how the two figures were derived by the AO. In such a circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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