In the scenario described, the revenue from the franchise business is first deposited into the franchisor's account and then transferred to the franchisee as per the terms of the franchise agreement. It is important to determine the nature of the transaction to determine the accounting treatment and tax implications.

If the franchisor is acting as an agent for the franchisee and the franchisee actually earned the revenue, then the transfer of revenue to the franchisee would not be considered an expense for the franchisor. In such a case, they should recognize the revenue in the books of the franchisee and not the franchisor.

However, if the franchisor is earning revenue because of the franchise agreement, and then transferring a portion of that revenue to the franchisee, then the transfer could be considered an expense for the franchisor. In such a case, the revenue earned by the franchisor would be recognized as income, and the amount transferred to the franchisee would be recognized as an expense in the books of the franchisor.

Regarding TDS, if the transfer is considered an expense for the franchisor, then TDS may be applicable on the amount transferred to the franchisee, as per the provisions of the Income Tax Act, 1961. However, the applicability of TDS would depend on the specific facts and circumstances of the transaction.