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TMI Blog2015 (11) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... nue Bad debt disallowance - CIT(A) deleted the addition - Held that:- Sale/purchase price of shares had been credited in the respective accounts. The CIT(A) follows special bench decision of DCIT vs. Shreyas S. Morakhia [2010 (7) TMI 455 - ITAT MUMBAI] that value of the share transacted by a broker-assessee on behalf of the concerned client is very much allowable as bad debts. The Revenue fails to rebut this legal position.- Decided against revenue Brokerage rebate disallowance - CIT(A) deleted the addition - Held that:- Assessee’s gross brokerage income is of ₹ 59,23,26,790/-. The corresponding brokerage refund figure in question is @ 0.59% of this gross income. The relevant segments are cash and F&O of ₹ 9,06,412.88 and ₹ 25,61,094.25; respectively. Pages 93 to 102 contain list of assessee’s clients alongwith codes and amounts refunded in all cases. The Revenue is unable to rebut correctness thereof. We hold in these facts that assessee’s claim of brokerage rebate in question does not lack genuineness element. It has come on record that it is in stock broking business. It has accordingly offered the impugned rebate of ₹ 34,67,507/- in business expedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the concerned payees in computing their income. The assessee’s other arguments disputing applicability of TDS provision shall be readjudicated as per law. - Decided in favour of assessee for statistical purposes.. - ITA No. 1531/Ahd/2011, ITA No. 1718/Ahd/2011 - - - Dated:- 6-11-2015 - Shri Pramod Kumar, Accountant Member And Shri S. S. Godara Judicial Member For the Petitioner : Shri R.K. Gupta, Sr. DR For the Respondent : Shri Vijay Ranjan, AR ORDER Per Shri S. S. Godara, Judicial Member These cross appeals filed by the Revenue and assessee for AY 2008- 09, arise from order of the CIT(A)-XVI, Ahmedabad, dated 28.04.2011 passed in case no.CIT(A)-XVI/AC.Cir.3/710/10-11, in proceedings under section 143(3) of the Income Tax Act, 1961, in short the Act . 2. We come to Revenue s appeal ITA No.1531/Ahd/2014. Its first ground challenges the lower appellate order deleting disallowance / addition of NSE penalty of ₹ 74,515/-. The assessee is a limited company in stock broking business. It paid the impugned sum to the National Stock Exchange for non-compliance of its bye-laws. The assessee s case was that this penalty sum pertained to procedural del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,25,83,17,835/- in the nature of share capital, reserves and surplus etc. It files tribunal s order in its own case for AY 2004-05 in ITA No.1890/Ahd/2007 decided on 19.12.2008 deciding the very issue in its favour in identical circumstances. We follow suit in these facts and reject this Revenue s ground as well. 4. The Revenue s third substantive ground assails correctness of the CIT(A) action in deleting bad debt disallowance of ₹ 27,35,991/- comprising of debit balance written off of ₹ 25,60,148/- and bad debt of ₹ 1,75,843/-. These entries are mainly in the nature of vatav kasar. Some of them are less than of ₹ 10,000/- even. The Assessing Officer observed that there was no material on record to prove the same to have been actually become bad. And also that the assessee had offered only brokerage sums as its income u/s 36(2) of the Act in profit and loss account. He accordingly made the impugned disallowance of this bad debts claim. 5. The CIT(A) deletes this bad debts disallowance after quoting case law of TRF Ltd. Vs. CIT, 323 ITR 397 (SC) to the fact that it is not necessary to prove the same to have actually become bad as per the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of brokerage rebate in question does not lack genuineness element. It has come on record that it is in stock broking business. It has accordingly offered the impugned rebate of ₹ 34,67,507/- in business expediency. We do not find any ground to interfere with the lower appellate findings under challenge. This forth and last ground is also rejected. Revenue s appeal ITA No.1531/Ahd/2011 is dismissed. 9. We advert to assessee s appeal ITA No.1718/Ahd/2011. Its first ground challenges Section 14A disallowance of ₹ 15,50,074/-. Its exempt income from dividends reads a figure of ₹ 11,67,255/- arising from investment of ₹ 3,37,75,313/- in shares of M/s. Arvind Mills Ltd. with long term investment in shares of its subsidiary amounting to ₹ 18,70,95,122/-. The assessee did not attribute any expenditure corresponding to its exempt income. It pleaded to have sufficient interest free funds at its disposal in relation to the impugned investments. The Assessing Officer quoted lack of its fund flow statement for overruling assessee s plea of non-diversion of interest free funds. He accordingly invoked section 14A read with Rule 8D(2)(ii) and (iii) for computi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts to have paid leave encashment of ₹ 19,439/- as on 04.09.2008 and ₹ 19,661/- on 24.09.2008. There is no dispute about the above stated facts as well as the legal background of the issue. We follow the hon ble apex court order in these facts and direct the assessing authority in the same terms as indicated therein. This ground is allowed for statistical purposes. 13. The assessee s next ground raised in the instant appeal challenges disallowance of depreciation on Ahmedabad Stock Exchange card of ₹ 141/- made in the course of assessment and affirmed in the lower appellate proceedings. Both the lower authorities hold that stock exchange membership card is not an eligible asset u/s 32 of the Act as held by hon ble Bombay high court in M/s. Technoshares and Stocks Ltd. Vs. CIT 193 Taxman 248. The CIT(A) observes that the hon ble apex court has reversed the above stated decision as reported in 327 ITR 323 with a rider that the same relates to Bombay Stock Exchange card only. He reproduces relevant portion of this judgment as well. However, the Revenue fails to point out any distinction between the assessee s Ahmedabad Stock Exchange card and relevant features of B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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