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TMI Blog2012 (8) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.44,98,210/which was held to be not deductible as a bad debt in view of the provisions of Section 36(2) could be considered as an allowable business loss?" 2 This reference has been made at the instance of the assessee and arises out of the order of the Tribunal dated 19.12.1994 in Income Tax Appeal No.1495/Bom/94 relating to the assessment year 19911992. 3 Briefly the facts leading to this reference are as under: a) The assessee is a stock and share broker. During the assessment year 19911992, the assessee sought to write off an amount of Rs.47.58 lacs as bad debts, due to breach committed by 3 members of the Bombay Stock Exchange. The Assessing Officer on examination of the assessee's claim held that the assessee was not entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er provisions including the benefit of deduction as a business loss. 6 Mr. Sanjeev Shah, Learned Counsel appearing for the applicant submits as under: a) The issue arising in the present reference stands concluded by the order of this court in the matter of Commissioner of Income Tax v. Shreyas S. Morakhia dated 28th February, 2012 in Income Tax Appeal No. 89 of 2011. It has been held therein that even if a part of the bad debts has been taken into account while computing the income of the assessee, and offered for tax in a earlier year, the same would be sufficient satisfaction of Section 36(2) of the Act. b) In any view of the matter, even if the amount of Rs.44.98 lacs is not allowable as a bad debt, the same should be considered as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction was therefore not allowable. So far as, deduction to the extent of Rs.11.81 lacs is concerned, the same is on account of speculation loss and hence, cannot be allowed as deduction from the general profits and gains earned by the assesee in respect of the other income. In support of the aforesaid submission, he invited our attention to explanation (2) to Section 28 of the Act. 8 We have considered the submission. So far as, the submission of Mr. Shah for the assessee that the decision of this court in the matter of Shreyas S. Morakhia (Supra) covers the issue is concerned, we are not expressing any opinion with regard to it as the same does not arise from the question referred to us. The Tribunal has considered that the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as bad debts, then the deduction can be granted only if the provision of Section 36 of the Act are satisfied and it is not open to an assessee to claim a deduction in the alternative under any other provision of the Act. In view of the above, we are not making any observation with regard to whether the claim of the assessee on merits is allowable as a business loss. We are only examining the issue posed for us viz. that when the claim made for bad debts is not satisfied, could it be considered as a allowable business loss. 10 Section 28 of the Act imposes a charge on the profits or gains of business or profession. The expression "Profits and gains of business or profession" is to be understood in its ordinary commercial meaning and the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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