TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 405
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....utside the purview of section 36(2) r.w.s.36(1)(vii) of the Act and also not allowable u/s 37(1) of the Act. 3. The brief facts are that assessee engaged in the business of Super Market/Hyper Market filed its original return of income on 15.10.2010 declaring loss of Rs. 13,87,46,874/- which was revised to Rs. 14,20,95,245/- by filing revised return on 24.01.12. The assessment was completed u/s 143(3) on 20.12.2012 determining the loss at Rs. 13,77,94,205/- and while completing the assessment the Assessing officer disallowed sundry balances written off of Rs. 43,01,040/-. The assessing officer in the assessment proceedings noticed that assessee has debited a sum of Rs. 43,01,040/- in P&L A/c on account of sundry balances written off. The AO....
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....ecurity deposit holding that deposit was given against lease of property therefore is capital deposit and it cannot be revenue expenditure. The CIT(A) sustain the disallowance holding that it is not allowable u/s 36(1)(vii) as bad debt and further held that since it is not allowable as bad debt the same is also not allowable expenditure u/s 37(1). 4. Ld. Counsel for the assessee submits that the assessee company was incorporated in financial year 2005 - 06. It is engaged in the business of running Super Market / Hyper Market / Retail stores of consumer items such as groceries, clothes, stationery, medicine, plastic items, vegetables, etc. under the brand name "Magnet". The profit margin in retail business is very small. The business requir....
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....rite-off a debt in the books of account, there is a pre-requisite condition that the same amount should have been offered as income in the books of account at some point of time in the past. He also pointed out that the said deposit has not been offered as 'Income' in the past, therefore it cannot be allowed as a revenue expenditure. Further the assessee has submitted a copy of Lease Deed dated 7th June 2008 and explained the various terms of Lease Deed. The sum total of the rent for basement and ground + three floors came to Rs. 10,75,260/- per month. As per Clause 6(8) of the Agreement between the lessor and the lessee a lock-in-period of five years is stipulated during which no party to the agreement could rescind the agreement. ....
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.....O. has mentioned all the facts which has been reproduced by him in para 3 of the assessment order, concluded that no details mentioned in the Cancellation Deed regarding period of rent, amount involved or the details of other charges against which the security deposit is adjusted. The assessee submits that the security deposit has been adjusted against the expenses such as rent, electric bills, telephone bills, etc. which are indeed revenue expenses. Hence, the said addition needs to be deleted. Since the said advances were given for business purpose towards commercial lease deposit and not to acquire any capital asset and on termination the appellant has rightly claimed as "Business Expenditure" and, therefore, the deletion needs to be de....
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.... of lease deed on 20.07.2009 for termination of the lease deed entered into on 07.06.2008 and agreed to terminate and cancel the lease deed w.e.f.30.06.2009. In the cancellation deed it was specifically agreed that security deposit paid by the assessee to the lessor has been adjusted towards outstanding rent, taxes, charges, electricity bills, telephone bills, and other charges upto 30th June, 2009 and there is no outstanding amount to be paid or refunded. The assessee has also break up of rent outstanding for seven months i.e. from December 2008 to June 2009 at Rs. 75,26,820/- which is at page no.2 of the paper book. Ld. Counsel submitted that though the AO has mentioned that these details are not available that were submitted in the cours....