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2011 (4) TMI 872 - ITAT, MUMBAIBad debts claim - Held that:- The issue in appeal is squarely covered in favour of the assessee relying on TRF Ltd. vs CIT [2010 (2) TMI 211 - SUPREME COURT] that after the assessment of section 36(1)(vii) w.e.f. 01.04.1989, in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt, in fact has become irrecoverable. It is enough of the bad debt is written off as irrecoverable in the accounts of the assessee - as in the present case CIT(A) directed the AO to allow deduction for bad debts only after he is satisfied that conditions of section 36(2) are satisfied The directions are quite justified & needs no interference. Disallowance of interest - interest bearing funds were used for non business purposes - Held that:- As assessee rightly contends, what has been termed as diversion of funds by the AO is not correct inasmuch as a plain look at the ledger account shows the sister concern's dues are commercial dues, on account of sales and purchases, and not on account of diversion funds - assessee had sufficient non interest bearing funds for in excess of monies recoverable form sister concerns, and, following the principles laid down by Hon'ble Jurisdictional High Court in CIT vs. Reliance Utilities and Power Ltd. (2009 (1) TMI 4 - HIGH COURT BOMBAY), the interest disallowance could not have been made - Decided in favor of the assessee Business loss - set off of loss on sale of mutual funds against delivery based share trading income - Held that:- The profit arising on sale and purchase of shares, even if these are delivery based transaction will be treated as belonging to speculation business within the meaning of Explanation to Section 73. Thus once the assessee is carrying on a speculation business and the profits and gains have arisen from that business during the course of the assessment year, the assessee is entitled to set off the losses carried forward from a speculation business arising out of a previous assessment year - in favour of assessee. Deemed dividend - transaction with GSP Securities as loan transaction on the ground that it was so treated by the auditors in their remark - Held that:- Persuing the ledger account of GSB Securities there are no payments by way of loans and advances to the assessee. Not only that there is no payment in the present case as transactions are in respect of purchase of shares and securities, and amounts due to the assessee are reflected by net of such debits, the transactions are not in the nature of payments for loans and advances - in favour of assessee.
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