TRAVELEX INDIA P.LTD, MUMBAI V. DCIT CIR 3(3), MUMBAI

ITA 8192/MUM/2010

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8650 (ITAT-MUMBAI)
• Duration Of Justice: 8 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 09-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 26-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Transfer pricing; Wholly owned subsidiary
• Section: 143(3); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAJESH KUMAR , ACCOUNTANT MEMBER ITA NO. 8192 / MUM . /2010 ( ASSESSMENT YEAR : 20 06 07 ) TRAVELEX INDIA PVT. LTD. B WING, 7 TH FLOOR, EUREKA TOWER MINDSPACE, LINK ROAD, MALAD (W) MUMBAI 400 064 PAN AACCR4942B . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 3(3), MUMBAI . RESPONDENT ASSESSEE BY : SHRI NIRAJ SETH REVENUE BY : SHRI RAKESH RANJAN DATE OF HEARING 14 . 03 .20 19 DATE OF ORDER 05.04.2019 O R D E R AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ASSESSMENT ORDER DATED 27 TH SEPTEMBER 2010, PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) FOR THE ASSESSMENT YEAR 2006 07, IN PURSUANCE TO THE DIRECTION OF THE DISPUTE RESOLUTION PANEL II (DRP), MUMBAI. 2 . GROUND NO.1, BEING GENERAL IN NATURE, DOES NOT REQUIRE ADJUDICATION. 2 TRAVELEX INDIA PVT. LTD. 3 . AT THE TIME OF HEARING OF APPEAL, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT ON THE INSTRUCTIONS OF THE ASSESSEE HE DOES NOT WANT TO PRESS GROUND NO.5. HENCE, GROUND NO.5 IS DISMISSED AS NOT PRESSED. 4 . GROUND NO.6, BEING PRE MATURE AT THIS STAGE, DOES NOT REQUIRE ADJUDICATION. 5 . IN GROUND NO.2, THE ASSESSEE HAS CHALLENGED THE ADDITION MADE OF ` 66,55,541, ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT. 6 . BRIEF FACTS RELATING TO THIS ISSUE ARE, THE ASSESSEE , AN INDIAN COMPANY , IS A WHOLLY OWNED SUBSIDIARY OF TRAVELEX PLC , U.K. AND IS PART OF TRAVELEX GROUP. THE ASSESSEE PROVIDES INFORMATION TECHNOLOGY ENABLED SERVICES (ITES) TO ITS OV ERSEAS ASSOCIATED ENTERPRISE (A E). IN ITS TRANSFER PRICING STUDY, THE ASSESSEE BENCH MARKED THE PRICE CHARGED FOR PROVISION OF ITES TO THE A ES BY SELECTING TRANSACTIONAL NET MARGIN METHOD (TNMM) AS THE MOST APPROPRIA TE METHOD WITH OPERATING PROFIT/ TOTAL COST (OP/TC) AS THE PROFIT LEVEL INDICATOR (PLI). BY UNDER TAKING A SEARCH IN THE DATABASES ASSESSEE SELE CTED 20 COMPANIES AS COMPARABLES WITH ARITHMETIC MEAN OF 9.93%. SINCE , THE MARGIN SHOWN BY THE ASSESSEE AT 16.04% WAS HIGHER THAN THE MEAN MARGIN OF THE COMPARABLE COMPANIES, THE ASSESSEE CLA IMED THE PRICE CHARGED TO THE AE TO BE AT ARM'S LENGTH. THE TRANS FER PRICING OFFICER , HOWEVER, 3 TRAVELEX INDIA PVT. LTD. DID NOT ACCEPT THE CLAIM OF THE ASSESSEE. AFTER VERIFYING THE TRANSFER PRICING STUDY REPORT, THE TRANSFER PRICING OFFICER OBSERVED THAT THE SEARCH PROCESS ADOPTED BY THE ASSESSEE TO SELECT COMPARABLES IS NOT RELIABLE. THEREFOR E, REJECTING THE TRANSFER PRICING STUDY REPORT OF THE ASSESSEE AND MANY OF THE COMPARABLES SELECTED, THE TRANSFER PRICING OFFICER UNDER TOOK A FRESH SEARCH IN THE DATABASE S TO SELECT COMPARABLES BY USING THE DATA FOR FINANCIAL YEAR 2005 06. IN THIS PROCESS, THE TRANSFER PRICING OFFICER SELECTED 13 COMPARAB LES WITH ARITHMETIC MEAN OF 24% A S AGAINST THE MARGIN SHOWN BY THE ASSESSEE AT 16.04%. THIS RESULTED IN AN UPWARD ADJUSTMENT OF ` 66,55,541, TO THE PRICE C HARGED BY THE ASSESSEE TO THE A E. THE ADJUSTMENT TO THE ARM'S LENGTH PRICE SUGGESTED BY THE TRANSFER PRICING OFFICER WAS CONSIDERED FOR ADDITION BY THE ASSESSING OFFICER IN THE DRAFT ASSESSMENT ORDER. 7 . THOUGH, THE ASSESSEE RAISED OBJECTIONS BEFORE THE DRP AGAINST THE TRANSFER PRICING ADJUSTMENT, HOWEVER, THE DRP REJECTED THE OBJECTIONS OF THE ASSESSEE. 8 . IN TERMS WITH THE DIRECTIONS OF THE DRP, THE ASSESSING OFFICER PASSED THE IMPUGNED ASSESSMENT ORDER. 9 . BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , IF TWO OF THE COMPARABLES SELECTED BY THE TRANSFER PRICING OFFICER VIZ., 4 TRAVELEX INDIA PVT. LTD. VISHAL INFORMATIO N TECHNOLOGIES LTD. AND MAPLE E SOLUTIONS LTD. ARE EXCLUDED, ASSESSEES MARGIN WILL BE WITHIN 5% OF THE AVERAGE MARGIN OF THE REST OF THE COMPARABLES. PROCEEDING FU RTHER, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , VISHAL INFORMATION TECHNOLOGIES LTD. CANNOT BE CONSIDERED AS A COMPARABLE AS THE BUSINESS MODEL OF THE COMPANY IS TOTALLY DIFFERENT FROM THE ASSESSEE. HE SUBMITTED , MAJOR PORTION OF THE WORK OF THE AF ORESA ID COMPANY WAS OUTSOURCED TO THIRD PARTIES WHICH IS EVIDENT FROM THE LOW EMPLOYEE COST OF THE COMPANY. HE SUBMITTED , COMPARED TO THE LOW EMPLOYEE COST OF VISHAL INFORMATION TECHNOLOGY LTD., ASSESSEES EMPLOYEE COST IS 58.02%. THUS, HE SUBMITTED , THIS COMPANY CANNOT BE TREATED AS COMPARABLE. AS REGARDS MAPLE E SOLUTIONS LTD., THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THIS COMPANY CANNOT BE CONSIDERED AS A COMPARABLE TO THE ASSESSEE PRIMARILY DUE TO THE FACT THAT THE FINANCIAL DATA OF THE COMPANY IS UNRELIABLE. HE SUBMITTED , DIFFERENT BENCH ES OF THE TRIBUNAL ACROSS INDIA HAVE REJECTED THIS COMPANY AS A COMPARA BLE DUE TO THE AFORESAID REASON . I N SUPPORT OF HIS CONTENTION, LEARNED AUTHORISED REPRESENTATIVE RELIED UPON A NUMBER OF DECISIONS. 10 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE DRP AND THE TRANSFER PRICING OFFICER. 5 TRAVELEX INDIA PVT. LTD. 11 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD IN THE LIGHT OF THE DECISIONS CITED BEFORE US. INSOFAR AS VISHAL INFORMATION TECHNOLOGIES LTD. IS CONCERNED, FROM THE FACTS AND MATERIAL AVAILABLE ON RECORD, IT IS NOTICED THAT THE BUSINESS MODEL OF THE COMPANY IS TOTALLY DIFFERENT FROM THE ASSESSEE, AS , IT DOES NOT UNDERTAKE THE WORK ITSELF BUT OUTSOURCES IT TO THIRD PARTY VENDOR S . THIS FACT IS CLEARLY DISCERNI BLE FROM THE LOW EMPLOYEE COST OF THE COMPANY WHICH IS EVIDENT FROM THE FINANCIAL STATEM ENTS FILED IN THE PAPERBOOK . CONSIDERING THE AFORESAID ASPECT, THE HONBLE DELHI HIGH COURT IN RAMP GREEN SOLUTIONS PVT. LTD. V/S CIT, [2 015] 377 ITR 533 (DEL.), HAS HELD THAT THIS COMPANY CANNOT BE TREATE D AS COMPARABLE TO OTHER COMPANIES . SIMILAR VIEW HAS BEEN EXPRESSED IN VARIOUS OTHER DECISIONS OF NOT ONLY DIFFERENT HIGH COURTS BUT DIFFERENT BENCHES OF THE TRIBUNAL AS SUBMITTED IN THE L EGAL PAPER BOOK FILED BEFORE US. THAT BEING THE CASE, FOLLOWING THE CONSISTENT VIEW EXPRESSED IN THE JUDICIAL PRECEDENTS CITED BEFORE US, WE DIRECT THE ASSESSING OFFICER TO EXCLUDE THIS COMPANY FROM THE LIST OF COMPARABLE S . 12 . AS REGARDS COMPARABILITY OF MAP L E E SOLUTIONS LTD. , IT HAS NOW BEEN WELL SETTLED THROUGH VARIOUS JUDICIAL PRECEDENTS THAT THIS COMPANY CANNOT BE TREATED AS COMPARABLE DUE TO UNRELIABILITY OF ITS FINANCIAL DATA. IN THIS CONTEXT, WE MAY REFER TO THE FOLLOWING DECISIONS: 6 TRAVELEX INDIA PVT. LTD. I ) CIT V/S CUMMINS TURBO TECHNOLOGIES LTD., [2018] 91 TAXMANN.COM 307 (BOM.); II ) STREAM INTERNATIONAL SERVICES PVT. LTD. V/S ADIT, [2013] 31 TAXMANN.COM 227 (MUM.); III ) DEUTSCHE NETWORKING SERVICES PVT. LTD. V/S DCIT, ITA NO.8972/MUM./2010, DATED 14.09.2018; IV ) FRANKLIN TEMPLETON INTERNATIONAL SERVICES INDIA PVT. LTD. V/S DCIT, [2018] 89 TAXMANN.COM 439 (MUM.); V ) GOLDMAN SACHS SERVICES PVT. LTD. V/S DCIT, [2015] 63 TAXMANN.COM 9 (BANG.); AND VI ) HSBC ELECTRONIC DATA PROCESSING INDIA LTD. V/S ACIT, [2013] 38 TAXMANN.COM 141 (HYD.). 13 . THEREFORE, FOLLOWING THE CONSISTENT VIEW EXPRESSED IN THE DECISIONS REFERRED TO ABOVE REGARDING THE COMPARABILITY OF THIS COMPANY, WE DIRECT THE ASSESSING OFFICER TO EXCLUDE MAPLE E SOLUTIONS LTD. FROM THE LIST OF COMPARABLE S . CONSIDERING THE SUBMISSIONS O F THE LEARNED AUTHORISED REP RESENTATIVE THAT UPON EXCLUSION OF THE AFORESAID TWO COMPANIES, THE MARGIN OF THE ASSESSEE WOULD BE WITH IN 5% OF THE AVERAGE MARGIN OF THE REST OF THE COMPARABLES, WE DO NOT INTEND TO EXAMINE THE ACCEPTABILITY OR OTHERWISE OF D ATAM ATICS FINANCIAL SERVICES LTD., GOLD STONE INFRATEC LTD., ASIT C. MEHTA FINANCIAL SERVICES LTD., AS COMPARABLE S TO THE ASSESSEE WHICH IS LEFT OPEN FOR ADJUDICATION , IF ARISES , IN ANY OTHER ASSESSMENT YEAR IN FUTURE. THIS GROUND IS PARTLY ALLOWED. 7 TRAVELEX INDIA PVT. LTD. 14 . I N GR OUND NO.3, THE ASSESSEE HAS CHALLENGED ADDITION MADE OF ` 4,38,499, ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT RELATING TO INTEREST PAID ON DELAYED SETTLEMENT OF TRAVELERS CHEQUES (TCS) AND PRE PAID CARDS (PPCS). 15 . BRIEF FACTS ARE, AS OBSERVED BY T HE TRANSF ER PRICING OFFICER, ASSESSEE IN ITS ORDINARY COURSE OF MONEY CHANGING BUSINESS PAYS INTEREST TO ITS A ES FOR DELAYED SETTLEMENT OF TC S AND PPCS. IT IS STATED THAT A ES CHARGE INTEREST AT THE SAME RATE FOR LATE PAYMENT OF SETTLEMENT FUNDS FOR TCS AND PPCS WHI CH IS USED IN TCS AND PPCS CONTRACTS WORLDWIDE. TO SUBSTANTIATE THE AFORESAID FACT, THE ASSESSE E SUBMITTED A LETTER FROM THE AE CONFIRMING THE RATE OF PAYMENT OF INTEREST WORLDWIDE. HOWEVER, THE TRANSFER PRICING OFFICER OBSERVED , WHEN THE ASSESSEE WAS CALLED UPON TO FURNISH THE RATE OF INTEREST AND ITS WORKING, THE ASSESSEE WITHOUT FURNISHING THE WORKING STATED THAT THE RATE OF INTEREST CHARGED WAS 6.75% PER ANNUM. THE TRANSFER PRICING OFFICER OBSERVED , AS PER A CIRCULAR ISSUED BY THE RBI, THE EXTERNAL COMMERCIAL BORROWING (ECB) RATE OF INTEREST FOR LESS THAN SIX MONTHS IS LIBOR PLUS 50 BASIS POINTS. ACCORDINGLY, HE RESTRICTED THE RATE OF INTEREST TO BE PAID TO THE AE AT 5. 5 0 % . AS A RESULT, AN ADJUSTMENT OF ` 4,38,499, WAS MADE TO THE ARM'S LENGTH PRICE OF THE INTEREST PAID. 8 TRAVELEX INDIA PVT. LTD. 16 . THOUGH, THE ASSESSEE CHALLENGED THE AFORESAID TRANSFER PRICING ADJUSTMENT BEFORE THE DRP, HOWEVER, IT WAS UNSUCCESSFUL. 17 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE ASSESSEE HAS COMPUTED I NTEREST ON DELAYED PAYMENT TO A ES AT LIBOR PLUS 200 BASIS POINTS. HE SUBMITTED , IN SIMILAR NATURE OF TRANSACTIONS THE CHARGEABLE INTEREST RATE VARIES BETWEEN LIBOR PLUS 200 BASIS POINTS TO LIBOR PLUS 300 BASIS POINTS . IN SUPPORT OF SUCH CONTENTION, LEARNED AUTHORISED REPRESENTATIVE RELIED UPON THE FOLLOWING DECISIONS: I ) TRICOM INDIA LTD. V/S ITO, ITA NO.322/MUM./2014, DATED 03.09.2014; AND II ) M/S. FIRE STAR INTERNATIONAL PVT. LTD. V/S CIT, ITA NO.488/ MUM./2015, DATED 31.07.2015. 18 . THUS, HE SUBMITTED , THE RATE AT WHICH THE ASSESSEE HAS PAID INTEREST TO A ES IS AT ARM'S LENGTH. FURTHER, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , RBI ECB RATE OF INTEREST CANNOT BE APPLIED TO THE PAYMENTS MADE BY THE ASSESSEE. 19 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OB SERVATIONS OF THE DRP AND THE TRANSFER PRICING OFFICER. 20 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. AS COULD BE SEEN, THE DISPUTE IS ONLY WITH REGARD TO THE RATE OF INTEREST. WHILE THE ASSESSEE HAS PAID INTEREST AT LIBOR PLUS 200 BASIS POINTS, THE TRANSFER PRICING OFFICER HAS COMPUTED A RM'S LENGTH PRICE OF 9 TRAVELEX INDIA PVT. LTD. INTEREST AT LIBOR PLUS 50 BASIS POINTS. IN OUR VIEW, THE COMPUTATION OF INTEREST BY THE TRANSFER PRICING OFFICER ON THE BASIS OF RBI ECB RATE IS FLAWED SINCE THE INTERES T PAID BY THE ASSESSEE ARE TO A ES LOCATED IN FOREIGN COUNTRIES. IN VIEW OF THE AFORESAID, WE HOLD THAT THE INTERES T PAID BY THE ASSESSEE TO THE A ES IS AT ARM'S LENGTH. THE DECISIONS RELIED UPON BY THE LEARNED AUTHORISED REPRESENTATIVE ALSO SUPPORT THIS VIEW. ACCORDINGLY, THE ADDITION MADE IS DELETED. GROUND IS ALLOWED. 21 . IN GROUND NO.4, THE ASSESSEE HAS CHALLENGED THE ADDITION OF ` 11,24,899. 22 . BRIEF FACTS ARE, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION FOR AN AMOUNT OF ` 11,24,899, ON ACCOUNT OF BAD DEBT. AFTER CALLING FOR NECESSARY DETAILS AND EXAMINING THEM, THE ASSESSING OFFICER FOUND THAT THE AMOUNT IN DISPUTE IS NOT IN THE NATURE OF BAD DEBT BUT AN EMPLOYEE OF THE COMPANY HAD EMBEZZLED THE SAID AMOUNT. THE ASSESSING OFFICER OBSERVED , THE ASSESSEE COULD NOT FURNISH COPY OF FIRST INFORMATION REPORT (FIR) OR ANY EVIDENCE TO SUBSTANTIATE THE CLAIM OF EMBEZZLEMENT. HE OBSERVED , THE ASSESSEE HAS ONLY FURNISHED A COPY OF INTERNAL NOTE STATING THAT THE AMOUNT IN DISPUTE HAS TO BE WRITTEN OFF AS BAD DEBT. HE FUR THER OBSERVED , NEITHER THE INTERNAL NOTE WAS SIGNED BY ANYONE NOR BEARS ANY DATE. THEREFORE, ALLEGING THAT THE CLAIM OF THE ASSESSEE IS NOT PROVED THROUGH PROPER DOCUMENTARY 10 TRAVELEX INDIA PVT. LTD. EVIDENCES, THE ASSESSING OFFICER DISALLOWED THE DEDUCTION CLAIMED. THOUGH, THE ASS ESSEE CHALLENGED THE AFORESAID DISALLOWANCE BEFORE THE DRP, HOWEVER, THE ADDITION WAS SUSTAINED. 23 . THE LEARNED AUTHORISED REPRESENTATIVE REITERATING THE STAND TAKEN BEFORE THE DEPARTMENTAL AUTHORITIES SUBMITTED , THE FACT OF EMBEZZLEMENT BY THE EMPLOYEE HAS BEEN CLEARLY STATED IN THE AUDITORS REPORT. FURTHER EXPLAINING, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , ON INVESTIGATION BY THE MANAGEMENT IT WAS FOUND THAT ONE OF THE EMPLOYEE, SHRI V.S. PRAVEE N, HAD DEFALCATED AN AMOUNT OF ` 15,24,228, FROM THE ASSESSEE COMPANY. HE SUBMITTED , THIS FACT WAS ALSO ADM ITTED BY THE CONCERNED EMPLOYEE . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THOUGH THE COMPANY COULD RECOVER AN AMOUNT OF ` 4,70, 000 FROM THE CONCERNED EMPLOYEE, HOWEVER, THE BALANCE AMOUNT OF ` 10,53,996, COULD NOT BE RECOVE RED FROM THE CONCERNED EMPLOYEE RESULTING IN A LOSS TO THE COMPANY. HE SUBMITTED , THOUGH THE ASSESSEE HAD NOT LODGED ANY FIR AGAINST THE CONCERNED EMPLOYEE, HOWEVER, HIS SERVICES WERE TERMINATED. THE LEARNED AUTHORISED REPRES ENTATIVE SUBMITTED , THOUGH THE ASSESSEE HAS WRONGLY CLAIMED THE DEDUCTION AS BAD DEBT, HOWEVER, IT HAS TO BE ALLOWED AS BUSINESS LOSS. 24 . THE LEARNED DE PARTMENTAL REPRESENTATIVE RELYING UPON THE OBSERVATIONS OF THE DEPARTMENTAL AUTHORITIES SUBMITTED THAT THE 11 TRAVELEX INDIA PVT. LTD. ASSESSEE HAS NOT FURNISHE D ANY EVIDENCE TO PROVE THAT THE AMOUNT IN DISPUTE WAS EMBEZZLED. HE SUBMITTED , ASSESSEE INITIALLY CLAIMED THE AMOUNT AS BAD DEBT , WHEREAS , SUBSEQUENTLY HE CLAIMED IT AS BUSINESS LOSS. THUS, HE SUBMITTED , ASSESSEES CLAIM CANNOT B E ALLOWED. 25 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. AS COULD BE SE EN FROM THE FACTS ON RECORD, ASSESSEE HAS CLAIMED THE DEDUCTION OF ` 11,24,899, AS BAD DEBT. HOWEVER, SUBSEQUENTLY, IT WAS EXPLAINED TO THE ASSESSING OFFICER THA T THE AMOUNT IN DISPUTE WAS ACTUALLY EMBEZZLED BY ONE OF THE EMPLOYEES OF THE COMPANY. IT IS NOTICED FROM PARA 20 OF THE AUDITOR S REPORT AND ITS ANNEXURE , A COPY OF WHICH IS AT PAGE 490 OF THE PAPER BOOK , ALONG WITH WITH ANNEXURE AT PARA 20, THE AUDITORS HAVE SPECIFICALL Y MENTIONED ABOUT THE EMBEZZLEMENT OF FUND BY THE EMPLOYEE. FURTHER , THE INTERNAL NOTE OF T HE COMPANY AT PAGE 494 OF THE PAPERBOOK A LSO BEARS TESTIMONY TO THE FACT OF THE EMBEZ ZLE MENT. NON FILING OF FIR BEFORE THE POLICE MAY BE DUE TO VARIO US REASONS. THERE FORE, FOR THAT REASON ALONE, ASSESSEES CLAIM THAT THE AMOUNT IN QUESTION WAS EMBEZZLED CANNOT BE R EJECTED. HAVING HELD SO, IT IS SEEN FROM THE AUDITORS REPORT THAT OUT OF THE AMOUNT OF ` 15,23,996, THE COMPANY COULD RECOVER AN AMOUNT OF ` 4,70,000, AND THE BALANCE AMOUNT OF ` 10,53,996, COULD NOT BE RECOVERED. THUS, THE QUANTUM OF LOSS SUFFERED BY THE ASSESSEE IS ` 10,53,996 AND NOT ` 11,24,899, AS CLAIMED BY THE 12 TRAVELEX INDIA PVT. LTD. ASSESSEE. FURTHER, THOUGH THE LOSS INCURRED BY THE ASSESSEE ON ACCOUNT OF EM BEZZLEMENT MAY NOT BE ALLOWABLE AS BAD DEBT BUT CERTAINLY IT HAS TO BE ALLOWED AS BUSINESS LOSS. IN VIEW OF THE AFORESAID, WE DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION FOR AN AMOUNT OF ` 10,53,99 6 . GROUND IS PARTLY ALLOWED. 26 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.04.2019 SD/ RAJESH KUMAR ACCOUNTANT MEMBER SD/ SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 05.04.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI