9911796707
TMI Blog2024 (7) TMI 1472X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the instant appeal are that the Assessing Officer (AO) in assessment proceedings queried the assessee in respect of the expenditure claimed in the sum of Rs. 37.43 lakh under the account head 'repossession charges'. The assessee-company, in the business of a collection agent for banks and financial institutions, explained the same to be payments made to various individuals, in cash, engaged by it to repossess the assets given in security to banks by the defaulting borrowers, and who are being pursued by it for recovery of debt. Locals, who have influence over the people of the region are engaged for the purpose, paying them the impugned sums. The list of payees, sought for verification, contained about 400 names, with each payment at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of the same being not genuine or inflated. The expenditure incurred is reasonable in relation to the gross commission income of Rs. 362.70 lakh. He was, however, unable to answer the Bench if anyone would agree for a remuneration at Rs. 20,000, or even less, for repossessing property worth crores, or even lakhs. Smt. Devi, the ld. Sr. DR, would, relying on the orders by the Revenue Authorities, submit that the expenditure being wholly unproved, they had acted reasonably in restricting the disallowance to 50% of that claimed. 4. We have heard the parties, and perused the material on record. 4.1 The issue arising for adjudication, as we discern, is the deductibility in law, and in the facts and circumstances of the case, of the assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conomic justification for such expenditure, which is for the concerned institution, engaging commission agents at a substantial cost, to see, but the legality thereof. We say so as employing anti-social elements in the Society, or otherwise to, using force, threat or other coercive measures, dispossess people, however just it may otherwise be, of their assets, can hardly be regarded as legal in a civil society, violate as it does several provisions of the IPC, 1860. It is for this reason that it becomes necessary for us to examine if, firstly, such expenditure is sanctioned by the Agreement and, two, even so, if it, being in violation of law, is liable to be disallowed u/s.37(1) r/w Explanation thereto. This aspect has received consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 persons, stated to be 'influential' persons of the locality, without as much as a proof of their identity. Why, for all one knows, these 'persons' may not exist. Further, unless each of the said persons falls in a different locality, a person once identified for the purpose would normally be engaged for another property in the area/locality, while there is no repetition at all. No one goes searching for such persons, found satisfactory, all over again and, further, how many such 'influential' people one could find in a locality, being, rather, a few for the entire area. This refrain by the Revenue is understandable and, thus, valid. The detail furnished is sketchy, and its non-verifiability, admitted. It is, as we see it, only a make-bel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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