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2022 (12) TMI 388 - ITAT BANGALOREUnexplained cash credit u/s 68 - no documentary evidence was submitted by the assessee on ITBA portal to substantiate the claim with regard to filing the confirmation of the creditors and therefore the NFAC confirmed the order of the AO - HELD THAT:- As along with the written submission, the assessee had filed the confirmation of the 2 creditors and those confirmations are available - The only error was that it was filed in physical form and was not uploaded in the ITBA portal in soft form and the confirmation filed in physical form was not taken cognizance by the NFAC. Thus in the light of the availability of confirmation filed in physical form before the First Appellate Authority, the issue with regard to the aforesaid addition should be remanded to the AO for consideration afresh in the light of the confirmation already filed before the First Appellate Authority in physical form. Accordingly, this issue is set aside to the AO for confirmation denovo. Disallowance of bad debts written off - only reason assigned by both the Revenue authorities is that the assessee did not show as to what efforts the assessee made to recover the debts before writing off as bad debt - HELD THAT:- CBDT, on the basis of the aforesaid decision in the case of TRF Ltd [2010 (2) TMI 211 - SUPREME COURT] issued Circular No.12/2016 dated 30.05.2016 as CBDT has clearly laid down that deduction should be allowed if a debt is written off as irrecoverable in the books of accounts of the assessee in the relevant previous year. In the light of the aforesaid decision of the Hon’ble Supreme Court and CBDT Circular disallowance of deduction on account of bad debt written off is unsustainable and the same is directed to be allowed as deduction. Disallowance u/s 40(a)(ia) - sales promotion expenses - According to the AO, since the assessee did not deduct tax at source on the payments made to the hotels, the same claimed by the assessee cannot be allowed as deduction - HELD THAT:- It is pertinent to mention that the AO has not mentioned as to what is the nature of the aforesaid expenses and how it falls within the parameters of payments specified in section 40(a)(ia) - The First Appellate Authority also confirmed the order of the AO. In the light of the admitted position that the sum in question was the payment made to hotels for consumption of food, there is no requirement of complying with the requirements of section 40(a)(ia) of the Act, especially when the AO has not spelt out as to what is the nature of payment and as to how the payment falls within the ambit of payments referred to under section 40(a)(ia) of the Act. Hence, the addition made in this regard is directed to be deleted. Disallowance of expenses incurred by the assessee in procuring gift item to the customers - HELD THAT:- The only error was that it was filed in physical form and was not uploaded in the ITBA portal and the confirmation filed in physical form was not taken cognizance by the NFAC. In the light of the availability of bill in physical form before the First Appellate Authority, the issue with regard to the aforesaid addition should be remanded to the AO for consideration afresh in the light of the bill already filed before the First Appellate Authority in physical form. Accordingly, this issue is set aside to the AO. Disallowing commission paid - HELD THAT:- Thus payment in question has not been made to any related party. The law is well settled that in the matter of making business decisions, it is the prerogative of the businessman as to how he should conduct his business affairs. AO cannot sit in the armchair of the businessman and decide as to what should be paid as commission and to whom - disallowance of the commission expenses cannot be sustained and the same is directed to be deleted. Disallowance of commission expenses - HELD THAT:- AO cannot sit in judgment over business decisions taken by the assessee in the matter of payments of commission. For the reasons given while deciding the said ground, the disallowance made by the Revenue authorities cannot be sustained and the same is directed to be deleted.
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