9911796707
TMI Blog2014 (5) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... of the relevant previous year or any earlier year, it satisfies the condition stipulated in section 36(2) (i) and the assessee is entitled to deduction u/s 36(l)(vii) by way of bad debts after having written of the said debts from his books of account as irrecoverable - Revenue could not bring any contrary binding decision in its support, nor could it controvert the finding of CIT(A) – Decided against Revenue. - I.T. A. No.1112 /AHD/2011 & C.O.NO.121/AHD/ 2011 - - - Dated:- 29-4-2014 - Shri G. C. Gupta And Shri Anil Chaturvedi, A.M.,JJ. For the Appellant : Shri P. L. Kureel, Sr. D.R. For the Respondent : Shri Marmik G. Shah ORDER Per Shri Anil Chaturvedi,A.M. 1. This appeal is filed by the Revenue against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the amount was irrecoverable and therefore the same was written off. The submission of the Assessee was not found acceptable to the A.O. A.O was of the view that the business of share broking is different from general trading business and the stock broker acts as an agent for purchase and sale on behalf of his clients and in the ordinary course of business makes payment on behalf of his clients and only commission/brokerage is the income of the Assessee. The bad debts which has been claimed by Assessee is not accounted for as his income and therefore the same is not allowable. He therefore held that the bad debt was not allowable as the condition laid down under section 36(2) has not been satisfied by the Assessee and accordingly disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the purchase amounts due from the clients could not be recovered by Assessee. The aforesaid submission of the Assessee has not been controverted by Revenue by bringing any contrary material on record. We further find that the issue of write off of bad debts in case of share broker was before the Special Bench of Tribunal in the case of Shreyas S. Morakhia (supra). The issue before the Special Bench was as under: Whether on the facts and circumstances of the case and in law, the assessee, who is a share broker, is entitled to deduction by way of bad debts under section 36(1)(vii) read with section 36(2) of the Income Tax Act, 1961 in respect of the amount which could not be recovered from its clients in respect of transactions effected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company had only credited brokerage in the P L account? 10. The aforesaid issue was decided by the Hon ble High Court holding as under:- Following the aforesaid order we hold that the money receivable from the client has to be treated as debt and since it became bad, it was rightly considered as bad debt and claimed as such by the assessee in the books of accounts. Since this bad debt occurred in the year in question, it was shown by the assessee in that manner. Since the brokerage payable by the client is apart of the debt and that debt had been taken in to account in the computation of the income, the conditions stipulated in Sub-Section (2) of Section 36 read with section 36(l)(vii) stand satisfied in this case. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
