TaxTMI 
TaxTMI 
2022 (3) TMI 168
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.... the following grounds of appeal : "1. The learned Commissioner of Income-tax (Appeals) has grossly erred in confirming the disallowance of Rs. 7,99,893 out of total disallowance of Rs. 9,19,669 being business deposits/advances written off during the year and the reasons assigned by him in doing so are wrong and are contrary to the provisions of Income-tax Act and Rules made thereunder. 2. The appellant craves leave to add to/or amend and/or delete and/or modify and/or alter the aforesaid ground of appeal as and when the occasion demands." 2. The brief facts of the case are that the assessee is a private limited company and is engaged in the business of share and stock broking for cash and derivative segment, depository....
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....urpose of business and could not be recoverable and are written off. But the Assessing Officer found that the advances paid by the assessee are one time payments and the landlords on vacating the rental premises have not refunded the amount and the recovery is doubtful. Finally the Assessing Officer observed that the claim cannot be allowed and made an addition of Rs. 9,19,669 and assessed the total loss of Rs. 6,54,24,550 and passed the order under section 143(3) of the Act dated December 9, 2016. 4. Aggrieved by the order, the assessee has filed an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) considered the grounds of appeal, submissions of the assessee and the findings of the Assessi....
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.... sole crux of the disputed issue as envisaged by the learned authorised representative that the non-recovery of security deposits provided to the landlords written off in the books of account are to be treated as a revenue expenditure. Whereas, the Assessing Officer has made disallowance of Rs. 9,19,669 and the Commissioner of Income-tax (Appeals) has restricted the addition to the extent of Rs. 7,99,893. We find that the assessee has provided the advances/security deposit to the landlords for rental premises and after vacating the premises the assessee has to get the refund of security deposits from the landlords. For various reasons the assessee could not recover and it was not placed on record the basis and what are the attempts made by ....
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....see has disclosed these facts under loan and advances in the balance-sheet and is being accepted. 8. Further, the liability trust upon the landlord to refund the security deposit or adjust as per the terms of agreement. The assessee is dutybound to make the rent payment every month/year and the same has been claimed as a revenue expenditure in the books of account and allowable under the Act. We find the security deposits takes the character of assurance and the enduring benefit only if there is direct benefit obtained. But in the present case, the security deposit is provided to landlord and at the same time the assessee is paying the rent. The security deposit cannot be considered as an enduring benefit to the assessee as the rent is b....