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2015 (5) TMI 608 - ITAT MUMBAI

2015 (5) TMI 608 - ITAT MUMBAI - TMI - Additions on account of Gross Receipts - A.O. making addition by 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 contingent. .....

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Capital Markets - whether the same may be allowed as bad debt? - 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 consequentia .....

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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 circumstance, most appropriate view would be that the orders of the revenue authorities be set aside with the directions to th .....

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ed 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 Receipts 21,20,714 B Disallowance on account of Bad Debts 6,13,413 C Disallowance of Commission paid 4,08,872 D Disallowance u/ .....

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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/- 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 R2 .....

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nce 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 .....

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e 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 filing of return of income. Hence, the Ld. CIT(A) is not at all justified in making disallowance of ₹ 13,08,872/- and hence the same may be dele .....

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e to the Mr. R. 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. Addition on account of unexplained cash credit under Section 68 of the Act - ₹ 31,427/- 12. The Ld. CIT(A) erred in confirming the action of the AO in making additio .....

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ined 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 indiv .....

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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 this amount from his clients. The assessee submitted before the AO that this amount shall remain irrecoverable. 6. The AO disregarded the explanation and observed that si .....

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y 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 money not received. The assessee has been pleading that STCI retained the money in line of money not paid to them by the assessee. The assessee says that she could not pa .....

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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 co .....

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ory 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 .....

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se 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 to its rights and remedies under Law as against the client and the Franchisee and in its sole discretion, withhold either in full or in part any service charges, brokerag .....

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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 vs Associated Cables (P) Ltd., reported in 286 ITR 596, wherein the Hon ble Court held, Retention money withheld by contractee pending completion of contract work does n .....

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set, 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 he .....

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ld 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 of the assessee had been that the money could not be recovered from her clients, which were due to be paid to SCSTCI. 25. The assessee claimed the sum a bad debt. The AO d .....

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rable 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 reconcile or to differentiate the amounts involved in Ground A and B. It is apparent that the figures too would tally. In such a case it would be better that the AO give an exact .....

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d 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, 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 disa .....

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