2013 (5) TMI 13

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....to Prestige Holidays Resorts Pvt Ltd to which it had paid commission of Rs.15,25,137 without appreciating the facts and without considering the CBDT's Circular No.715 dated 08-08- 1995 on the issue. 2. On the facts and in the circumstances of the case and in law, the CIT (A) erred in deleting the addition of Rs.45,885 being 50% of the money forfeited by assessee from defaulters, without appreciating the fact that once money is forfeited by assessee, there is no contractual obligation to refudn any amount and therefore, assessee's offer of only 50% of the forfeited amount fortax is arbitrary and a mere ruse to defer taxation of the balance 50% amount indefinitely". 2. We have heard the learned DR and the learned Counsel in detail. 3....

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....ure does not call for any deduction of tax, as held by the jurisdictional High Court relied upon by the CIT (A). Whatever commission was paid by assessee, that amount was already covered by the TDS on which there is no dispute. As seen from the order of AO also, he disallowed the amount under section 40(a)(ia) with a clear mention of reimbursement of the expenses, so there is no dispute to the nature of the expenditure claimed. In view of this, we see no reason to interfere with the order of the CIT (A) who not only considered the facts but also considered the law on the issue in arriving at that decision. The ground is accordingly rejected. 5. Ground No.2 is with reference to bringing to tax an amount of Rs.45,885 being 50% of the money....

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.... income as "retained money" account and treated in which the forfeiture takes place and accounted for as "income". b) The balance 50% is transferred to the "retention money" account and treated as a liability as on the year end. This is to take care of an eventuality of subsequent refunds to the defaulting parties in case of genuine difficulties like say a family emergency, accident, hospitalization etc. c) Any unutilized amount out of the aforesaid balance of 50% is offered to tax as income of the immediately succeeding AY. viii) Accordingly during the year under consideration assessee forfeited a sum of Rs.91,770 (net of refunds/ transfers) on forfeited contracts. ix) 50% of the said amount was offered to tax during the year u....