TaxTMI 
TaxTMI 
2017 (11) TMI 1209
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.... "I. Disallowance of write off of rental deposit amounting to Rs. 1,000,000 * The Honourable Commissioner of Income Tax (Appeals) ['Hon'ble CIT(A)'] erred in upholding the disallowance of writeoff of rental deposit made. * The Hon'ble CIT(A) has erred in not appreciating the fact that the loss incurred by the Appellant on account of write-off is in relation to business and allowable as a businessloss under section 28 of the Income Tax Act, 1961 ['the Act']. * Without prejudice to the above, the Hon'ble CIT(A) has erred in not giving a deductionfor the above mentioned amount as the same is in the nature of a legitimate business expenditure incurred wholly and in the ordinary cours....
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....o leave to add, to alter, to amend, to rescind or to modify the grounds herein above or produce further documents, facts and evidence before or at the time of hearing this appeal. For the above and any other grounds which may be raised at the time of hearing, it is prayed that necessary relief may be provided. 3. It was submitted by ld. AR of assessee that only one issue is involved in the present case and this is regarding the assessee's claim for write off of rental deposit which was made by the assessee and was disallowed by AO and this disallowance was confirmed by the CIT (A). He submitted that in para no. 6.1 of his order, the CIT (A) has reproduced the contents of email message dated 25.05.2009 as per which it was stated ....
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....ent case, the claim of the assessee is not regarding write off of bad debts u/s. 36(1) (vii) and the claim of the assessee is regarding business loss in respect of write off of a deposit and therefore, in the present case, the assessee has to establish that the deposit in question has become irrecoverable. As per email dated 25.05.2009 reproduced by CIT (A) on para no. 6.1 of his order, it cannot be said that the deposit in question is not recoverable. 5. Before us also, in the paper book, the assessee has submitted the same emails dated 15.05.2009, 18.05.2009, 22.05.2009 and 25.05.2009 and there is no evidence brought on record before us also in support of this that the deposit in question has become irrecoverable. Copy of 11 judgments ....
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...., this tribunal order is also not applicable in the present case. 6. Similarly in the case of M/s. LG Soft India Pvt. Ltd. Vs. DCITin IT(TP)A No. 1121/Bang/2011 dated 22.03.2013, copy available on pages 19 to 50 of paper book, facts noted in para no. 6 of this tribunal order are these that the assessee had placed a refundable deposit of Rs. 24,93,600/- with the landlord and since the assessee had difficulty in recovering the deposit from the landlord, it had filed a suit before the Hon'ble High Court of Karnataka which was dismissed on the ground that the lease deed was not duly registered. Thereafter the assessee wrote off the rental deposit in its books and claimed as deduction while computing business profits of the assessee and i....
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....for the business purpose or not and therefore, loss in those circumstances is allowable as business loss or not. Hence this judgment is also not applicable in the present case because the facts are different. 9. The next judgment is judgment of Hon'ble Apex Court rendered in the case of Ramchandar Shivnarayan Vs. CIT as reported in 111 ITR 263. In this case, the dispute was regarding claim of the assessee in respect of cash brought by the assessee to business place of the assessee for buying securities and the dispute was as to whether such loss was incidental to carrying on of business of purchase of government securities to earn profit and therefore, it was deductible as business trading loss. In the present case, the issue is differen....
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....o. (P.) Ltd. as reported in 65 ITR 381. In this case, the issue in dispute was regarding allowability of increased remuneration of executive officers. It was disallowed by the AO on this basis that increase in remuneration or salary of officers was not reflected in increase in profits of assessee and therefore, it was not an expenditure which can be justified as laid out wholly and necessarily for purposes of business. The facts of the present case are different and therefore, this judgment is also not applicable. 13. The next judgment cited before us is the judgment of Hon'ble Apex Court rendered in the case of Hero Cycles (P.) Ltd. Vs. CIT as reported in 63 taxmann.com 308, copy available on pages 91 to 96 of paper book. In this case, ....