TMI Blog2022 (12) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... is that the assessee did not show as to what efforts the assessee made to recover the debts before writing off as bad debt - HELD THAT:- CBDT, on the basis of the aforesaid decision in the case of TRF Ltd [ 2010 (2) TMI 211 - SUPREME COURT ] issued Circular No.12/2016 dated 30.05.2016 as CBDT has clearly laid down that deduction should be allowed if a debt is written off as irrecoverable in the books of accounts of the assessee in the relevant previous year. In the light of the aforesaid decision of the Hon ble Supreme Court and CBDT Circular disallowance of deduction on account of bad debt written off is unsustainable and the same is directed to be allowed as deduction. Disallowance u/s 40(a)(ia) - sales promotion expenses - According to the AO, since the assessee did not deduct tax at source on the payments made to the hotels, the same claimed by the assessee cannot be allowed as deduction - HELD THAT:- It is pertinent to mention that the AO has not mentioned as to what is the nature of the aforesaid expenses and how it falls within the parameters of payments specified in section 40(a)(ia) - The First Appellate Authority also confirmed the order of the AO. In the light of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. ITA No.686/Bang/2022: The first issue that arises for consideration in this appeal is as to whether the Revenue authorities were justified in making the addition of Rs.1,61,960/- on account of unexplained cash credit under section 68 of the Act. 3. The assessee is an individual. He carries on the business of wholesale dealing in textiles. In the books of accounts of the assessee, the following outstanding credit balance were found: Sl. No. Name Balance as Balance as per Difference 1. Gini Silk 88941 88941 2. PARASRAM JAIKISHAN 73019 73019 Total 1,61,960 4. In the Order of Assessment, it has been mentioned by the AO that despite opportunities given to the assessee for filing confirmation of the creditors, the assessee did not file any confirmation and therefore the AO made an addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y reason assigned by both the Revenue authorities is that the assessee did not show as to what efforts the assessee made to recover the debts before writing off as bad debt. On this issue, the law is now well settled and the Hon ble Supreme Court in the case of TRF Ltd., in Civil Appeal Nos.5292 to 5294 of 2003 vide judgment dated 09.12.2010, has laid down the principle as follows: After 1.4.1989, for allowing deduction for the amount of any had debt or part thereof under section 36(1)(vii) of the Act, it is not necessary for assessee to establish that the debt, in fact has become irrecoverable; it enough if bad debt is written off as irrecoverable in the hooks of accounts of assessee. 10. The CBDT, on the basis of the aforesaid decision of the Hon ble Supreme Court, issued Circular No.12/2016 dated 30.05.2016 and in para 4 of the said Circular, the CBDT has clearly laid down that deduction should be allowed if a debt is written off as irrecoverable in the books of accounts of the assessee in the relevant previous year. In the light of the aforesaid decision of the Hon ble Supreme Court and CBDT Circular, I am of the view that the disallowance of deduction on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. The NFAC, however, observed that no documentary evidence was submitted by the assessee on ITBA portal to substantiate the claim with regard to filing the confirmation of the creditors and therefore the NFAC confirmed the order of the AO. Before us, learned Counsel for the assessee submitted that the appeal was filed in physical form and the assessee made a return submission dated 18.09.2019 and 19.03.2018. Copy of the Bill is placed at page 43 of Assessee s paper book. The only error was that it was filed in physical form and was not uploaded in the ITBA portal and the confirmation filed in physical form was not taken cognizance by the NFAC. I am of the view that in the light of the availability of bill in physical form before the First Appellate Authority, the issue with regard to the aforesaid addition should be remanded to the AO for consideration afresh in the light of the bill already filed before the First Appellate Authority in physical form. Accordingly, this issue is set aside to the AO. 14. The fifth issue that arises for consideration is as to whether the Revenue authorities were justified in adding a sum of Rs.6,31,961/- which was the total income of KAS Koth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, this ground raised by assessee is allowed for statistical purposes. 15. I am of the view that an identical order in the present Assessment Year would be just and sufficient. Accordingly, this issue is set aside to the AO for consideration denovo in the lines indicated by the Tribunal in the order for Assessment Year 2011-12 in assessee s own case. 16. The sixth and last issue that arises for consideration in this appeal is as to whether the Revenue authorities were justified in disallowing commission paid of Rs.2,30,700/-. In this regard, it is seen that the AO disallowed the commission for the following reasons: 11. It is noticed form the Profit Loss account that the assessee has given sales commission of Rs. 6,49,132/- to four persons. The assessee was asked to 'furnish the ledger Accounts of the sales commissions. From the observation of the ledger accounts, it is noticed that the assessee has paid the sales commission at different rate for same type of work, details of which is as under: Sl. No. Payee Amount @ rate 1. Raje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re are only two grounds which needs to be adjudicated and the first issue is adding KAS Kothari, HUF s income for Assessment Year 2014-15 to the income of the assessee. On this issue, while deciding an identical issue in Assessment Year 2013-14, I am already remanded the issue to the AO for fresh consideration. Following the said order, the issue in this Assessment Year is also set aside to the AO for consideration denovo on the lines indicated in the order for Assessment Year 2013-14. 20. The next issue that arises for consideration is the disallowance of commission expenses of Rs.1,28,018/-. This disallowance was made for identical reasons as was given by the AO for Assessment Year 2013-14. While deciding the identical issue for Assessment Year 2013-14, I have already held that the AO cannot sit in judgment over business decisions taken by the assessee in the matter of payments of commission. For the reasons given while deciding the said ground, I am of the view that the disallowance made by the Revenue authorities cannot be sustained and the same is directed to be deleted. 21. In the result, ITA No.687/Bang/2022 is partly allowed. 22. In the result, both the appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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