TaxTMI 
TaxTMI 
2022 (5) TMI 538
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....d at the time of preparing the Balance Sheet. 3. The Ld. CIT (A) erred in deleting the Disallowance of interest paid to others of Rs.1,14,29,361/-. On the facts and in the circumstances the Ld. CIT (A) allowed the appeal of the Assessee Company without calling for remand report under rule 46 A of the I.T. Rule, 1962 for the Additional Evidences submitted by the Assessee. 4. The Ld. CIT (A) erred in deleting Disallowance of Commission & Brokerage paid to Resident Agents amounting to Rs.57,52,980/and Account of Commission & Brokerage aggregating to Rs.43,95,937/- paid to foreign country. On the facts and in the circumstances Ld. CIT (A) relied upon the submission of the Assessee Company which does not prove the identity of the part' involved and genuineness of the transaction. 5. The appellant prays that the order of the CIT)A) on the above grounds be set aside and that of the AO be restored. 6. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 2. The brief facts of the case are that the assessee is engaged in the business of trading in soaps and soap based material. The assessee filed the r....
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.... referred at Para7.1 of the order. The A.O observed that the interest payments are made without deduction of TDS u/s 194A of the Act. The A.O. applied the provisions of Sec. 40(a)(ia) of the Act and made disallowance of Rs.1,14,29,361/-. (v) the A.O found that the assessee has paid brokerage/ commission to Domestic Agents and Foreign Agents. The assessee has filed the explanations and details referred at Para 8(d) of the AO order and the assessee emphasized that no TDS U/sec195 r.w.s 5 and 9 of the Act is required, if the commission is paid to foreign agents. The A.O was not satisfied with the explanations and made the addition of brokerage and commission paid to foreign Agents and also commission paid to resident Agents. Finally the A.O. has assessed the total income of Rs.42,293,390/- and similarly worked out to computation of book profits under 115JB of the Act with addition of unrealized foreign exchange loss and passed the order u/s 143(3) of the Act dated 07.03.2014. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) on the dispute issues considered the grounds of appeal, submissions of the assessee, findings of the A.O and....
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.... this is well settled after 14-1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. As rightly contended by the AR of the appellant, the assessee company is entitled for deduction on account of bad debts if such bad debts are written off in the books of account for the relevant year as irrecoverable and the amount of such bad debts was offered to tax as income in the earlier years . In this case the relevant debts claimed as bad were written off by the assessee company in the books of account as irrecoverable and appellant has submitted that the said amount was offered as income by the assessee in the respective years of sale i.e in the FY 2006-07, 2008-09, 2009-10, 2010-11 which was substantiated by the ledger accounts of the relevant debtors. Reliance is placed on following case laws: T.R.F. Limited Vs. CIT (2010) 323 ITR 397.(SC):- Prior to 1st April, 1989, every assessee had to establish, as a matter of fact, that debt advanced by the assessee had, in fact, become irrecoverable. That position got altered by deletion....
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....e second disputed issue, the Ld. DR submitted that the CIT(A) has erred in deleting the foreign exchange loss. The Ld.DR has submitted that the A.O has made adequate enquiry referred at Para 6 to 6.4 of the order with respect to mark to market basis. Whereas the Ld.AR submitted that the CIT(A) has considered the foreign exchange rate difference and the fact of calculation of net foreign exchange loss in the books of accounts and relied on the Hon'ble Supreme Court decision in the case of Woodward Governor India Pvt Ltd, 312 ITR 254. We find the CIT(A) has dealt at Page 6 Para 4.3 as under: 4.3 This ground relates to disallowance of foreign exchange loss aggregating to Rs. 23,15,348/-. The assessee company has shown Exchange Rate Gain or Loss of Rs.12,54,560/-. During scrutiny proceedings the assessee company also filed ledger account of exchange rate difference and foreign gain or loss for the period from 01.04.2010 to 31 .03.2011 as per which there was a year end loss adjustment of forex of Rs 23.15,348/- The appellant is engaged in the business of trading in soaps and soap based material. The appellant has booked the sale at the prevailing exchange rate....
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....antile system, which brings into debit the expenditure amount for which a legal liability has been incurred before it is actually disbursed and brings into credit what is due, immediately it becomes due and before it is actually received; (ii) whether the same system is followed by the assessee from the very beginning and if there was a change in the system, whether the change was bona fide; (iii) whether the assessee has given the same treatment to losses claimed to have accrued and to the gains that may accrue to it; (iv) whether the assessee has been consistent and definite in making entries in the account books in respect of losses and gains; (v) whether the method adopted by the assessee for making entries in the books both in respect of losses and gains is as per nationally accepted accounting standards; (vi) whether the system adopted by the assessee is fair and reasonable or is adopted only with a view to reducing the incidence of taxation. Similar view has also been taken in the following judgements: • Pleasant Time Industries vs Department Of Income Tax I.T.A. No. 359Asr) /2010 • Oil & Natural Gas Corporation Ltd. Vs. DCIT (2002) 83 ITD ....
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....isions of Sec.40(a)(ia) of the IT Act is attracted and the amount paid as interest to others was disallowed. The appellant during the course of appellate proceedings have provided the details of interest paid. The same was provided during the scrutiny proceedings. The details of interest paid to others is as follows. Sr. No Name of the party Pan No. Amount TDS 1 Farid Sabuwala ALRPS7134F 3,288,593 328,859 2 Fazal Sabuwala AAEPS2748D 6,938,636 693,865 3 Shehnaz Sabuwala ABFPS2753Q 764,946 76,496 4 Dimple Sabuwala AAVJPS0881L 10,329 1,033 5 Doison International ALRPS7134F 419,340 41,934 6 Interest on TDS 7,517 Total 11,42,361 1,142,186 In view of the above and on the basis of the said facts the AO is directed to delete the addition of Rs. 1,14,29,361/- made on account of interest paid to others. The ground of appeal filed on this issue is hereby allowed. 7.1 The last ground of appeal which the revenue has challenged is with respect to disallowance of commission and brokerage paid to resident and foreign agents. ....