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TMI Blog2022 (3) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... g the rent. The security deposit cannot be considered as an enduring benefit to the assessee as the rent is being paid. The situation changes if the assessee has provided only security deposit and no rent has been paid. The assessee has provided the security deposit and has been paying the rent regularly. We applying the principles of going concern concept, compare with the debtors, when the recovery is doubtful the claim is written off as bad debts in the profit and loss account. Assessee claim can be allowed as a revenue expenditure in this year and in future if the assessee could able to recover the money from the landlord in the legal suit or any other mode the same has to be offered as an income of the assessee. Accordingly, we set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s lending and borrowing and proprietary share/derivative trading. The assessee has filed the return of income for the assessment year 2014-15 declaring a total loss of ₹ 6,65,47,60 and the return of income was processed under section 143(1) of the Act. Subsequently, the case was selected for scrutiny and notice under sections 143(2) and 142(1) of the Act was issued. In compliance, the learned authorised representative of the assessee appeared from time to time and submitted the information and the case was discussed. The Assessing Officer on perusal of the financial statements found that the assessee has earned dividend income of ₹ 2,65,422 and the same was claimed exempted. The Assessing Officer required the assessee to submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deposits provided to the landlords for office branches, the assessee has submitted the details referred at para 4.3.1 of the order. The Commissioner of Income-tax (Appeals) has considered the facts of the claims and restricted the addition to the extent of ₹ 7, 99,893 and granted relief in other grounds of appeal and partly allowed the assessee's appeal. Aggrieved by the Commissioner of Income-tax (Appeals) order, the assessee has filed an appeal before the hon'ble Tribunal. 5. At the time of hearing, the learned authorised representative submitted that the Commissioner of Income-tax (Appeals) has erred in sustaining the addition to the extent of ₹ 7,99,893 irrespective of the fact that these advances are provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t remains that the money of the assessee-company utilized for the business purpose in providing security deposits to the landlords. Prima facie the assessee is in the business of share trading and share transactions and also obtained borrowed funds for the business operations. The assessee out of the business revenue or the loans obtained has provided deposits to the landlords which cannot be disputed. 7. The assessee has been disclosing the deposits with the landlords in the audited financial accounts. Now the fact remains when the premises is vacated the security deposit either to be refunded to the assessee or should be adjusted against any outstanding rent payable and expenses outstanding payable to the landlord. If the total settlem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as provided only security deposit and no rent has been paid. The assessee has provided the security deposit and has been paying the rent regularly. We applying the principles of going concern concept, compare with the debtors, when the recovery is doubtful the claim is written off as bad debts in the profit and loss account. We are of the opinion that the assessee claim can be allowed as a revenue expenditure in this year and in future if the assessee could able to recover the money from the landlord in the legal suit or any other mode the same has to be offered as an income of the assessee. Accordingly, we set aside the order of the Commissioner of Income-tax (Appeals) and direct the Assessing Officer to delete the addition and allow the g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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