2021 (7) TMI 793

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....out appreciating that the said amount pertains to the interest receivable on the loan given to Rajhoo Bharot and the same was written off as bad debt as the said party shown inability to repay the said interest. Thus, the disallowance of Rs. 11,67,645/- made u/s. 36(1)(vii) is not justified and the same may be deleted. 2. The Ld. CIT (A) erred in confirming the disallowance of Rs. 17,14,430/- being referral fees paid to Networth Stock Broking Ltd. alleging that there no TDS compliance without appreciating that the Assessee has been paying referral fees to the said company since many years after due compliance of TDS. Thus, the disallowance of Rs. 17,14,430/- is unjustified. As evident, the assessee is aggrieved by confirmation of disallo....

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.... AO concluded that the assessee failed to establish the genuineness of the whole transaction. 4.2. The Ld. CIT(A) noted that the assessee advanced sum of Rs. 136.98 Lacs to Mr. Rajoo Barot on 24/01/2013. On the said sum, the assessee was charging interest on daily basis. The borrower repaid amount of Rs. 137 Lacs in installment but did not pay the interest. Accordingly, outstanding amount of Rs. 11.67 Lacs was written-off in the books of accounts. The borrower wrote a letter for waiver of entire amount of interest. Thus the outstanding amount of interest of Rs. 11.67 Lacs was not acknowledged as debt by the borrower even though the relevant entries were made by the assessee in the loan/advances account. Section 36(1)(vii) of the Income Tax....

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....i) in terms of decision of Hon'ble Apex Court in TRF Ltd. Vs. CIT (323 ITR 397). The ground stand allowed for statistical purposes. 6. Disallowance of referral fee: 6.1. The assessee paid referral fee of Rs. 17.14 Lacs to a group entity namely M/s. Networth Stock Broking Limited (NSBL). To verify the same, notices/summons was issued to various borrowers/clients. However, only two clients responded and furnished documents. In the reply, it was submitted by the borrower that the loans were sanctioned directly through one of the sales representatives of the assessee. Thus, it was concluded by Ld. AO that the assessee failed to produce evidences to support the referral fees paid by it. It was also noted that pursuant to MOU between the as....