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TMI Blog2015 (10) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... ent observed as though there is no provision for allowing deduction of a trading loss on account of embezzlement, section 37 of the Act provides for any expenditure for the purpose of business and there has to be nexus between the business operation and the loss. If the loss was directly connected with the business operation and incidental to carrying on of the business, the same has to be allowed as a deduction. Therefore, keeping in view the facts of the case and also the ratio of Hon'ble Punjab and Haryana High Court decision in the case of CIT vs. Pukhraj Wati Bubber (supra) the loss so incurred is held to be an allowable business loss. The addition made by the Assessing Officer is therefore deleted - Decided in favour of assessee. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;E' New Delhi (in short, the Tribunal) in ITA No.2462/Del/2011 for the assessment year 2007-08, claiming following substantial questions of law:- i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in deleting the addition of ₹ 45,03,927/- made by the AO on account of advance against order when the nexus between sending of money as against sale was not established and no service was rendered by the foreign buyer/receiver of the money and that too without deduction of tax at source as required under section 40(a) of Income Tax Act, 1961? ii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in deleting the addition of ₹ 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and telephone expenses. ₹ 90,000/- On appeal by the assessee, the CIT(A) vide order dated 17.2.2011, Annexure A.II deleted the additions mentioned at Sr.No.1 but confirmed the additions at Sr.Nos.2 to 6. Before the Tribunal, the revenue challenged the deletion of addition of ₹ 45,03,927/- at Sr.No.1 whereas the assessee challenged confirmation of additions by the CIT(A) at Sr.Nos. 2 to 6. The Tribunal vide order dated 18.5.2012, Annexure A.III dismissed the appeal filed by the revenue and partly allowed the appeal filed by the assessee. Hence the instant appeal by the revenue. 4. We have heard learned counsel for the appellant. 5. The following two additions made by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt is disallowable as per section 40(a) of the IT Act. The appellant has submitted that TDS was not deductible from these remittances as the amount in question was towards the attorney fees, taxation etc. which is not taxable as per the provisions of the Act. It has been stated that the security amount was refundable as per the contract and thus no income had arisen to the beneficiary. Similarly, in the case of locked fund insurance the funds were transferred for insurance policy and thus there was no income to the beneficiary. In case of EU taxation, the funds were transferred to EU taxation and again there was no income to the beneficiary so as to require deduction of tax at source. As regards, the attorney fee, it has been stated that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that such transaction took place. The appellant has also placed on record the newspaper cutting supporting his case that he was the victim of the fraud. After appraising the varied documentary evidence, it is held that the appellant was victim of fraudulent transaction. Having held so now the question is whether the loss arising due to the fraud as mentioned above is a business loss allowable as per the Income Tax Act. It has been contended that the loss has taken place during the course of business and should be allowed as such. 4.13. On careful consideration of the appellant's submission, it is held that the loss has been caused to the appellant due to the fraud which he fell victim to in the course of his business. The Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the security deposit was refundable and therefore, in view of circular, no tax at source was deductible. However, the landlord had later on adjusted the said amount towards rent and in such circumstances, the assessee could not have deducted tax at source and the adjustment of security deposit against rent due was a revenue expenditure. The finding of the Tribunal is as follows:- 10. We have duly considered the rival contentions and gone through the record carefully. The relevant question in the circular referred by the learned counsel for the assessee reads as under:- Question No.2 Whether tax is required to be deducted at source where a non refundable deposit has been made by the tenant? Ans: In cases where the tenant make ..... X X X X Extracts X X X X X X X X Extracts X X X X
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