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TMI Blog2020 (8) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, it was adjusted against the Bill and was rightly written-off from the accounts as deduction. Since the issue of interest has reached finality on deleting the addition by the Ld. CIT(A), therefore, the fact is very clear that assessee was not able to recover the whole amount from the concerned party and on final settlement of the dues, if impugned amount could not be recovered by the assessee, it is certainly a business loss to the assessee, for which, no addition should have been made by the authorities below. Disallowance of remuneration to the Director - HELD THAT:- The assessee company has declared income of ₹ 59,71,541/- in the return of income. Total turnover of the assessee is 5.85 Cr. as per Profit Loss A/c. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal beyond the period of limitation, delay in filing of the appeal is condoned. 4. Briefly the facts of the case are that the assessee company is engaged in the business of providing security and maintenance services to various group housing projects. The A.O. examined the books of accounts and noted that assessee has entered into an agreement with M/s PACL India Limited, according to which, the assessee shall charge interest @ 18% for the period of delay in payment after the due date. From the perusal of the profit loss account, it was found that the assessee had not charged any interest on delayed payment from M/s PACL India Limited and even, written off ₹ 3,92,479/- as deduction. The A.O. charged interest of ₹ 1,30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e any such conflict. However, no such document is filed. The assessee in reply stated that in the course of termination of the agreement between the assessee and M/s. PACL India Ltd., prior notice of 03 months was required to be given and no arbitration have been done. The assessee filed debit note to ATS which is reproduced in the assessment order to show deduction of ₹ 3,92,479/- from the running bill which parties have agreed. The A.O. considering the explanation of assessee to be an afterthought and made addition of ₹ 3,92,479/-. The Ld. CIT(A) confirmed the addition. 5. The Learned Counsel for the Assessee reiterated the submissions made before the authorities below. He has referred to page-7 of the PB which is copy of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on agreement it was decided between the parties that assessee would raise a debit note and both parties have agreed that only part amount would be paid and balance amount of ₹ 3,92,749/- shall not be paid to the assessee. Therefore, explanation of assessee is very specific and supported by the documents on record that assessee was not able to recover the amount from the party, therefore, it was adjusted against the Bill and was rightly written-off from the accounts as deduction. Since the issue of interest has reached finality on deleting the addition by the Ld. CIT(A), therefore, the fact is very clear that assessee was not able to recover the whole amount from the concerned party and on final settlement of the dues, if impugned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is increase in the remuneration of the Director at 212.5% which is not justified. The A.O. also noted that salary and other benefits of the staff have increased to 94%, therefore, increase of 94% in Director s remuneration was allowed and the impugned amount were disallowed. The Ld. CIT(A) confirmed the addition. 9. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that considering the turnover and profit earned by the assessee company, the Director s salary comes to ₹ 50,000/- per month only. Therefore, the increase was wholly justified and as such the same may be allowed. 10. The Ld. D.R. on the other hand relied upon the Orders of the authorities below. 11. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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