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TMI Blog2015 (10) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... m a speculation business arising out of a previous assessment year. Thus, applying this judgment of the jurisdictional High Court, the assessee is entitled for the set off of the impugned amount of amount of loss brought forward from assessment year 2001-02. No contrary judgment has been brought to our notice by the Ld. DR. Thus, respectfully following the judgment of Hon’ble Bombay High Court in the case of Lokmat Newspapers P. Ltd [2010 (2) TMI 94 - BOMBAY HIGH COURT] we decide this issue in favour of the assessee company. Thus, the AO is directed to allow the set off the brought forward loss. - Decided in favour of assessee. Disallowance of claim of bad debts - Held that:- The only objection of the authorities below was that the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in A.Y.2001-02 and that in AY.2006-07 are constant. 3. The learned CIT (A) has erred in not allowing the claim of bad debts amounting to ₹ 14,39,878/-. The learned CIT (A) has concluded that the advance given to the broker is of a capital nature, irrespective of the fact that the income derived from the said advance is treated as business income and not income under the head 'Interest on securities'. Since the income is in the nature of business income, the bad debts have been claimed as a deduction u/s.36(1)(vii). 4. The Appellant craves leave to add, alter, amend, vary modify and delete any or all of the above grounds of appeal. 2. Ground no.1 is not pressed by the learned counsel and therefore the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rward from assessment year 2001-02. Thus, the assessee filed an appeal before the Tribunal. 5. During the hearing before us, Ld. Counsel on behalf of the assessee company argued that the action of the AO in denying the benefit is contrary to law. The Ld. Counsel submitted that the issue is now no more res-integra, as this issue has been , settled by Hon ble Jurisdictional High Court in the case of CIT vs. Lokmat Newspapers P. Ltd. 322 ITR 43(Bom). On the other hand, the Ld. DR supported the orders of the authorities below and requested for confirmation of the order of Ld. CIT(A). 6. We have gone through the orders of the authorities below and have also considered submissions made by both the sides. It is seen by us that the loss was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of shares would constitute a loss from a speculation business for the purposes of the Explanation but that the profit which arises from a transaction involving the actual delivery of shares would not constitute a profit for the purposes of sub-sections (1) and (2) of section 73 in respect of which a set-off can be granted, introduces a restriction into the scope and ambit of the deeming fiction which is created by the Explanation to section 3, which is not contemplated by Parliament. The deeming fiction created by the Explanation to section 73 arises specifically in the context of the provisions of section and is confined to that purpose alone. Whether it is a profit or loss that has resulted from carrying on such business, is a considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness 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. Thus, applying this judgment of the jurisdictional High Court, the assessee is entitled for the set off of the impugned amount of amount of loss brought forward from assessment year 2001-02. No contrary judgment has been brought to our notice by the Ld. DR. Thus, respectfully following the judgment of Hon ble Bombay High Court, we decide this issue in favour of the assessee company. Thus, the AO is directed to allow the set off the brought forward loss. 8. Ground no.3 deals with the action of Ld. CIT(A) in not allowing the claim of bad debts amounting to & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the authorities below and submitted that the assessee is not clear about the provision in which the claim is allowable and requested that the order of the Ld. CIT(A) should be upheld. 11. We have heard both the parties. This fact is not disputed that the impugned amount represents bad debts. The genuineness of the claim has not been doubted. The only objection of the authorities below was that the impugned amount was not allowable as deduction u/s 36(1)(vii). In our considered view the impugned amount is allowable to the assessee as business loss, in any case. We derive support from the judgment of Hon ble Bombay High Court in the case of Harshad J Choksi vs CIT 349 ITR 250. Relevant para from this judgment is reproduced herein below: ..... X X X X Extracts X X X X X X X X Extracts X X X X
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