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TMI Blog2019 (2) TMI 2008X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in law and on facts in confirming the additions/disallowances made by the AO computing the total income of the assessee to the tune of Rs. 37,61,728/- as against income returned by the assessee at Rs. 6,42,970/-. 2. That the Ld. Commissioner of Income Tax (Appeals) has grossly erred in law and on facts in confirming the additions made by the AO to the tune of Rs. 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 Rs. 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing as under:- "3. I have heard both the sides and perused the relevant material on record. The case of the Revenue is that the assessee made a payment of Rent to BPCL and did not deduct tax at source which attracted disallowance under section 40(a)(ia). Second proviso to section 40(a)(ia) provides that where an assessee fails to deduct the whole or any part of the tax in accordance with the provisions of Chapter XVII-B on any such sum but is not deemed to be an assessee in default under the first proviso to Section 201(1), then for the purposes of section 40(a)(ia) it shall be deemed that the assessee has deducted and paid tax on said sum on the date of furnishing of return of income by the resident payee. The essence of this provision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 3,91,506/- on account of cash handling expenses. 8. The ld. Assessing Officer noted that assessee has claimed cash handling charges of Rs. 3,91,506/-. In response to the show cause notice, assessee submitted that the said amount was paid to three persons on account of cash handling expenditure and in fact it was a kind of salary pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce such expenses were incurred during the course of business and were necessary for carrying on the business, in my considered opinion, the same should not have been disallowed. I, therefore, order to delete the addition." 11. Moreover, I find that the 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 tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 lac on account of salary paid to Shri Kamaljeet Singh Sethi. Such a disallowance has been confirmed by the ld. CIT(A) also. 13. Before us, ld. counsel for the assessee has submitted that not only in the earlier years but also in the subsequent year the remuneration paid to the partners have always been allowed and looking to the fact that over the period of time assessee's business has increased and partnership deed was entered way back in the year 2004, therefore, increase in salary and in remuneration is wholly justified. Further, the partners' remuneration has to be allowed in terms of Section 40(b). Accordingly, he requested that matter can be remanded back to the file of the Assessing Officer to examine the past history and also all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces 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 Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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