TMI Blog2019 (2) TMI 2008X X X X Extracts X X X X X X X X Extracts X X X X ..... lude such rental income from the assessee in its return of income. It is, therefore, held that the case of the assessee is covered by second proviso to section 40(a)(ia) and hence the disallowance made cannot be sustained. - Decided in favour of assessee. Disallowance on account of cash handling expenses - HELD THAT:- Reasoning given by the Assessing Officer that handling of cash is responsible and risky work for which he should have engaged professionals, then he was required to deduct TDS. Such a reasoning for making the disallowance cannot be held to be valid ground, because in the nature of business carried out by the assessee which is selling of petrol and petroleum product from its petrol pump, huge cash is generated throughout the working hours and if assessee is paying cash handling charges to two persons which is in the form of salary, then disallowance cannot be made especially when vouchers for such payment have been produced. Accordingly, respectfully following the order of the Tribunal for the earlier years, we delete the same. Disallowance on account of remuneration paid to the partners - HELD THAT:- We remit the issue back to the file of the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on facts in confirming the additions made by the AO to the tune of ₹ 4,93,038/- u/s 40(a)(ia) of the Income Tax Act, 1961. 3. That the Ld. Commissioner of Income Tax (Appeals) has grossly erred in law and on facts in confirming the disallowance made by the AO of ₹ 3,91,506/-on account of cash handling expenses. The AO further failed to appreciate that the amount in question was for business purposes only. 4. That the Ld. Commissioner of Income Tax (Appeals) has grossly erred in law and on facts in confirming the disallowance of ₹ 18 lakhs on account of remuneration paid to the partner. 5. That the Ld. Commissioner of Income Tax (Appeals) has grossly erred in law and on facts in confirming the disallowance of claim made by assessee of bad debts amounting to ₹ 4,34,217/-. 6. That Ld. Commissioner of Income Tax (Appeals) has failed to provide reasonable and sufficient opportunity to the assessee. 2. In so far as grounds no. 2 and 3 are concerned, ld. counsel submitted that the same now stands covered by the decision of Tribunal in assessee s own case in the Assessment Years 2011-12 and 2012-13. 3. The facts in brief qua the disallowance u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mes graphically clear that if the payee has furnished his return of income under section 139 and has taken into account such sum paid by the payer for computing income in such return of income and has paid income tax thereon, then the payer cannot be treated as assessee in default. A fortiori, no disallowance under section 40(a)(ia) can be made in such circumstances. 4. Adverting to the facts of the instant case, it is seen that the assessee paid a sum of ₹ 6,36,920/- to Bharat Petroleum Corporation Limited. There can be question of suspecting that the BPCL did not include such rental income from the assessee in its return of income. It is, therefore, held that the case of the assessee is covered by second proviso to section 40(a)(ia) and hence the disallowance made cannot be sustained. I, therefore, order to delete the disallowance. This ground is allowed. 6. Thus, respectfully following the similar facts permeating in this year also, I delete the said disallowance u/s.40(a)(ia). 7. The next issue pertains to disallowance of ₹ 3,91,506/- on account of cash handling expenses. 8. The ld. Assessing Officer noted that assessee has claimed cash handling charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing hours and if assessee is paying cash handling charges to two persons which is in the form of salary, then disallowance cannot be made especially when vouchers for such payment have been produced. Accordingly, respectfully following the order of the Tribunal for the earlier years, I delete the same. 12. Coming to the issue of disallowance of ₹ 18 lacs on account of remuneration paid to the partners, the Assessing Officer on the perusal of the P L account noted that assessee has claimed ₹ 24 lacs as partners remuneration out of which Shri Kamaljeet Singh Sethi got salary of ₹ 12 lacs and two other lady partners have received ₹ 6 lasc each. On going through the partnership deed, he asked the assessee, why the other two ladies were getting salary, in response, assessee submitted that they are getting remuneration since the date of introduction of these partners in the partnership firm and the same remuneration has been paid in the earlier years also. AO also noted clause 18 of the Partnership Deed which read as under: That Shri Kamaljeet Singh Sethi the party of the first party will be working partner and hereby authorized to receive remuneration at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This is in consonance with the judgment of the Hon'ble Supreme Court in the case of TRF Ltd. (2010) 190 Taxman. 391 (SC). 18. On the other hand, Ld. D.R. relied upon the order of the Assessing Officer and ld. CIT(A) and submitted the no documentary evidences have been filed. 19. I find that, nowhere Assessing Officer has disputed the fact that assessee has not written off the bad debts as irrecoverable in the books of account, albeit the case of the Assessing Officer is that Assessee has not produced any documentary evidences that debt has become bad. As stated by the ld. counsel now there is no requirement under the law for the assessee to establish that debt has become irrecoverable and it is enough that the same is written off as irrecoverable in the books of account of the assessee. This has been also clarified by the CBDT Circular dated 30.05.2016 being Circular No.12/2016 [F.No.279/Misc/140/2015-ITJ], wherein the CBDT has clarified that now in the wake of judgment of Hon'ble Supreme Court in the case of TRF Ltd. (supra) no appeal should be filed by the Revenue before any Court or Tribunal. Thus, this clarification by CBDT also supports the case of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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