9911796707
TMI Blog2012 (7) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... computing the income of the appellant company at Rs. 10,36,155.00 as against return filed declaring loss of Rs. 31,41,921.00, by disallowing "Bad Debts" claimed u/s 36(1 )(vii) of the Act at Rs. 41,73,881.00. That the authorities below have disallowed the claim of "Bad debts" on wholly erroneous, illegal and untenable grounds, and it is prayed that the same be allowed as in law. ii) That the authorities below have failed to appreciate that the appellant company is a share broker and a member of The Delhi Stock Exchange Ltd. and is governed by the Rules & Regulations of the Exchange which make it obligatory for it to make payment to the Exchange of amounts payable against shares purchased irrespective of whether the appellant company has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of its income in terms of sections 28 & 29 of the Act. vii) That the appellant company craves leave that it may be permitted to amend, delete, modify all or any of the above grounds of appeal, and / or add any fresh ground before and / or in the course of the appeal proceedings. 3. The facts of the case are that the assessee company is a member of Delhi Stock Exchange and is carrying on the business of shares and stock broking alongwith the allied activities such as brokers/subbrokers, underwriters to new issues of shares, debentures and securities of all kinds, brokers and fixed deposit of companies, trading in shares, investment consultants etc. 3.1 The assessee had purchased shares from M/s Mannu Finlease Ltd. in January ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not claim the aforesaid amount as 'bad debt'. Insofar as the first submission of learned counsel for the Revenue is concerned, we do not find any force therein. As pointed out in the aforesaid admitted facts, the assessee had purchased the aforesaid shares on behalf of the sub-broker and, in fact, paid the amount of Rs. 1,06,10,247/-. As against this amount, he received only a sum of Rs.64 lacs. The brokerage which was received in the aforesaid transaction was shown as income by the assessee in the previous year, which was taxed as such as well by the Assessing Authority. Under these circumstances, only because shares were not delivered for want of full payment, which was to be made by the sub-broker to the assessee, it cannot be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for whatever consideration it could fetch and it would be adjusted against the balance amount of Rs. 41,37,881/- payable by the debtor, i.e. the subbroker. The above view has been approved by the Hon'ble High Court also. Accordingly, in the interest of justice, we remit this issue to the file of the AO. AO shall ascertain the value of the shares which were not delivered and the said amount should be adjusted against the amount of Rs. 41,37,881 payable by the debtor i.e. sub-broker. Accordingly, the matter stands remitted to the file of the AO. Needless to add that the assessee should be given adequate opportunity of being heard. 5. In the result, the appeal filed by the Assessee stands allowed for statistical purposes. Order pronounce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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