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TMI Blog2014 (1) TMI 1262X X X X Extracts X X X X X X X X Extracts X X X X ..... r STT paid by the assessee from the income tax on the income computed u/s. 115JB of the Act - This is the mode in which tax already paid is handed back at the time of final computation – Decided against Revenue. Deletion of bad debts made – Held that:- The decision in The Commissioner of Income Tax Versus Shri Shreyas S. Morakhia 2012 (3) TMI 103 - BOMBAY HIGH COURT ]followed - the requirements of section 36(2)(i) are fulfilled where a part thereof is taken into account in computing the income of the assessee – thus, the assessee was entitled to deduction by way of bad debts under section 36(1)(vii) read with section 36(2) in respect of the amount which could not be recovered from its clients in respect of transactions effected by him on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(2) and 142(1) was issued and served on the assessee. During the course of assessment proceedings, the Assessing Officer observed that the assessee company has calculated Book profit for the purpose of Section 115JB at Rs. 20,69,91,218/- and the tax payable @ 10% thereon comes to Rs. 2,06,99,122/-. However, the AO found that the assessee has computed income tax payable as per normal income tax provisions at Rs. Nil. The AO sought explanation from the assessee as to why tax from Book profit should not be computed as the same is more than the profit calculated as per IT computation. In response to this, the assessee filed the summary of computation as per return of income which is as under: Total Taxable income 27,35,11,960/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther observed that the assessee has debited an amount of Rs. 1,43,19,332/- as bad debts written off. The AO observed that Nonbrokerage portion is at Rs. 1,06,03,648/-. The AO sought explanation from the assessee as to why the claim should not be restricted to the brokerage portion and non-brokerage portion amounting to Rs. 1,06,03,648/- should not be disallowed as Non-brokerage part does not fulfill the conditions laid down in Sec. 36(2) of the I.T. Act, 1961. In response to this, the assessee relied upon the decision of Mumbai Special Bench in the case of DCIT Vs Shreyas S Morakia 342 ITR 285. The AO did not accept the submissions of the assessee and disallowed the claim of bad debt to the extent of Rs. 1,06,03,648/- and completed the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whose total income is assessed u/s. 115JB has no substance. In other words, when the total income is assessed and the tax chargeable is computed, it is from that tax which is chargeable, the tax paid u/s. 88E is given deduction, by way of rebate, u/s. 87 of the Act. This is the legislative intent. That is a promise to give deduction of the tax already paid. This is the mode in which tax already paid is handed back at the time of final computation. Therefore, the judgement referred by the Tribunal is strictly in accordance with law and does not suffer from any legal infirmity, which called for interference. Respectfully following the decision of the Karnataka High Court in the case of CIT Vs Hirizon Capital Ltd (supra), the findings of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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