TaxTMI 
TaxTMI 
2015 (9) TMI 380
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct'). The facts apropos this ground are that the assessee is engaged in the business of sugar as a commission agent. The assessee raised bills of commission with service tax. Only commission amount was credited to the Profit & Loss Account and the amount of service tax was separately taken. The AO observed that a sum of Rs. 6,20,631/- representing service tax, education cess and higher education cess (hereinafter cumulatively called as 'service tax' for convenience) was appearing as payable in the assessee's balance sheet. On being called upon to explain as to why the amount of service tax be not disallowed u/s 43B, the assessee contended that the amount of service tax was not realized and even the commission bills from sugar mills on which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e profit and loss account. The question arises whether any disallowance u/s 43B can be made under these circumstances. The ld. AR has brought to our notice certain direct decisions in which it has been held that no disallowance u/s 43B of the Act can be made in such a situation. The main thrust of the ld. AR has been on the argument that under the service tax rules, it becomes payable only when the payment for the same is received. Since the said amount of service tax was not received during the year, the ld. AR argued that no disallowance can be made on this score u/s 43B. For this proposition, he relied on the judgment of the Hon'ble Bombay High Court in CIT VS. Ovira Logistics (P) Ltd. (2015) 232 Taxman 240 (Bom). For similar proposition....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ills on account of non-recoveries from the buyers. The AO disallowed a sum of Rs. 7.75 lac on the ground that the debit notes issued by M/s Daya Sugar towards non-recoveries from their customers were not substantiated with any evidence. The ld. CIT(A) upheld the view taken by the AO. The assessee is aggrieved against the sustenance of disallowance. 5. We have heard the rival submissions and perused the relevant material on record. There is no dispute on the fact that the assessee wrote off a sum of Rs. 7.75 lac in his books of account as bad debt. The Hon'ble Supreme Court in T.R.F. Ltd. vs. CIT (2010) 323 ITR 397 (SC) has held that after 1.4.1989 the assessee is not required to establish that the debt has become bad in the previous year a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n respect of the amount of bad debt towards non-realisation of sale value of the shares. Answering the question in affirmative, the Special Bench held that the amount receivable by the assessee share broker on account of brokerage is a part of debt receivable by him from his clients against purchase of shares on their behalf and, once such brokerage is credited to his Profit & Loss Account and the same is taken into account in computing his income, the condition stipulated in section 36(2)(i) gets satisfied and, therefore, the write off of the debt representing the irrecoverable amount receivable from the clients against purchase of shares on their behalf is allowable as bad debt. The Hon'ble Bombay High Court in CIT vs. Shreyas S. Morakhiy....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any person not being any individual or HUF, who is responsible for paying to a resident any income by way of commission or brokerage, shall, at the time of credit of such income to the account of the payee or at the time of payment of such income, whichever is earlier, deduct income-tax thereon at the specified rate. The second proviso states that an individual or HUF, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limit prescribed u/s 44AB 'during the financial year immediately preceding the financial year in which such commission or brokerage is credited or paid' shall be liable to deduct income-tax under this section. The instant assessee is an individual. As such, he ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The AO issued inquiry letters to creditors/debtors for confirming the balance of the assessee in their books of account. On making a comparative study of the balance shown by the assessee in his books of account vis-à-vis those parties showing the assessee's balance, the AO made addition of Rs. 4,97,747/-. The assessee did not assail before the ld. CIT(A) the addition on account of credit balance of Rs. 8,059/- in the books of his debtor M/s Agarwal Sugar and Chemicals, which addition was automatically confirmed. As regards the remaining addition of Rs. 4,89,688/-, the assessee furnished reconciliation. The ld. CIT(A) got convinced with such reconciliation and ordered for the deletion of addition to this extent. The Revenue is aggr....