TMI Blog2023 (2) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... which the Revenue authorities have come to the conclusion that the assessee has debited embezzlement loss. Assessee has submitted that the Ld. CIT(A) has erred in stating that the assessee has recovered the embezzlement loss for the current year from the dues of such employees/director. As submitted a sheet of ledger account by reference to which he claimed that a very meagre amount has been collected and hence, the Ld. CIT(A) is wrong in holding that has been recovered. In our considered opinion, on the facts and circumstances of the case, this issue needs to be remitted back to the file of the AO. The AO is directed to factually verify the recovery and allow the balance of loss. As regards of the Ld. CIT(A) direction to the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer (hereinafter referred as AO) and confirmed by the Ld. CIT(A) is bad in law in as much as the Hon'ble CIT(A) has failed to appreciate the facts and the law laid down in his regard. 2. Disallowance of business expenditure a. That on the facts and circumstances of the case and in law, the Ld.CIT(A) has grossly erred in upholding the disallowance of loss incurred to the extent of Rs.41,17,498 made by the Ld. AO, on account of illegal siphoning of funds by the Finance Director by holding that there was no nexus between the loss incurred vis- -vis the business operations carried on by the Appellant. b. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has grossly erred in not followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) for taking necessary remedial action in respect of Assessment Year 2012-13 and 2013-14 are illegal, bad in law and without jurisdiction and against the principle of natural justice. 4.That without prejudice, CIT(A) has no jurisdiction to issue directions in respect of Assessment Year 2012-13 and 2013 without giving an notice/opportunity to the assessee. Hence, the said directions are illegal, bad in law, without jurisdiction and against the principle of natural justice. 3. Brief facts of the case are that in the assessment order, the AO noted that the assessee was a subsidiary of WK Inc. and was engaged in providing advertising services to clients in India. During the course of assessment, he noted that the Finance director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready been subjected to tax. In nutshell the loss so claimed is basically expenses booked in the past and current previous year. 5.5 One of the important facts ascertained from the submission of the appellant is that after detection of the alleged embezzlement, the appellant company by passing a special resolution has, removed the said director (Finance) Mr. V. Balasubramaniam from the company and withheld his all dues as recovery measure. It is also noted that the alleged loss of Rs. 13485555/- pertains to the period January 1, 2012 to March 31, 2014 (FY 2011-12, FY 2012-13 and FY 2013-14 corresponding to AY 2012-13, AY 2013-14 and AY 2014-15 respectively). Though detailed breakup of said embezzlement amount has not been submitted, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gets part relief on this ground of appeal. 5. Against this order, the assessee is in appeal before us. 6. We have heard both the parties and perused the records. The ld. Counsel for the assessee submitted that the Ld. CIT(A) is totally wrong when he says that the details were filed. He said that the details were dully submitted and the embezzlement by the concerned director was in inflation of expenditure account in different years and only Rs.4117498/- pertains to current Assessment year. We note that the ld. CIT(A) has clearly written that the break up were not given but the ld. Counsel for the assessee submitted the same was given. Furthermore, the Ld. CIT(A) submitted that in principle, the ld. CIT(A) has accepted that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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