TaxTMI 
TaxTMI 
2009 (8) TMI 636
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....clared income of Rs. 33,25,404. This return was processed under section 143(1) of the Income-tax Act. Statutory notice under section 143(2) of the Act was given and the assessment was completed under section 143(3) of the year. During the assessment, the Assessing Officer found that the assessee had claimed bad debt in the sum of Rs. 50,30,491. According to the Assessing Officer, conditions for allowability of this amount as bad debt as stipulated in section 36(1)(vii) of the Income-tax Act read with section 36(2) thereof were not satisfied and, therefore, he disallowed the said claim of bad debt. The order of the Assessing Officer was confirmed in appeal by the Commissioner of Income-tax (Appeals). However, in further appeal preferred by the assessee before the Tribunal, the Tribunal has allowed the appeal and held that the aforesaid amount should have been allowed as bad debt by the Assessing Officer as conditions stipulated in section 36(1)(vii) and section 36(2) have been satisfied. Against the order of the Tribunal the present appeal is preferred by the Revenue. 5. The only question which falls for consideration is as to whether the conditions laid down in the aforesaid pro....
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....old submissions were, however, as under: (i) It was not a "debt" . This flowed from the argument that since the assessee had made payments for purchase of the shares himself, it should have been treated as investment by the assessee and thus, no debt was to be recovered. (ii) The second submission, which is based upon the first one, was that the loss thereon should have been treated as capital loss. 8. On this premise, it is sought to be argued that the provisions of section 36(1)(vii) read with section 36(2) of the Act have not been satisfied. 9. Before we proceed to deal with this contention of the learned counsel for the Revenue, it would be apposite to take note of the discussion contained in the order of the Tribunal to understand the manner in which the Tribunal has dealt with this aspect: "2.2 Before us, the learned authorised representative for the assessee at the very outset pointed out that in view of the judgment of the hon'ble jurisdictional High Court of Delhi in the case of CIT v. Morgan Securities and Credits P. Ltd. [2007] 292 ITR 339 (Delhi); [2007] 210 CTR (Delhi) 336 the burden was no longer on the assessee to establish that t....
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....rlier years, we find that this issue has also been considered by the Delhi Bench of the Tribunal in the case of Madhup Jain (supra) vide their order dated May 31, 2007 in I. T. A. No. 3950/Del/2004. In the said case, the Tribunal held that the brokerage payable by the clients is a part of the debt and since the part of the debt had been taken into account in the computation of income, the entire debt including the purchase/sale price paid by the assessee-broker has to be taken as considered in computation of income and the conditions prescribed in section 36(2)(i) were satisfied. The same view was taken by the Mumbai Bench of the Tribunal in the case of Olympia Securities Ltd. in their order dated December 21, 2006, in I. T. A. No. 4053/Mum/2002. This aspect had also been considered by the Hyderabad Bench of the Tribunal in the case of ITW Signode India Ltd. v. Deputy CIT [2007] 110 TTJ (Hyd) 170. In that case, the bad debt had been claimed on account of intercorporate deposits (ICD) along with the interest due thereon. The Tribunal noted that the words used in section 36(1)(vii) were 'any bad debt or part thereof,' and since the interest payable being part of the debt, had bee....
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....he assessee/respondent herein is a member of the Delhi Stock Exchange and is carrying on the business of shares and stock broking along with the allied activities such as broker/subbroker, underwriters to new issues of shares, debentures and securities of all kinds, brokers and fixed deposit of companies, trading in shares, investment consultants, etc. The assessee had purchased shares of M/s. Mannu Finlease Ltd. in January and February, 1996, on behalf of and on instructions from its sub-broker M/s. Glory Securities Ltd. Total value of these shares purchased by the assessee was Rs. 1,06,10,247 at an average price of Rs. 55 per share. The said sub-broker had made payment to the extent of Rs. 64 lakhs only. As remaining amount of Rs. 41,37,881 was not paid, the assessee did not deliver those shares to the sub-broker. However, in the said year, brokerage was shown as income in the Income-tax return, which was assessed as well. Since balance payment was not made in the next year also, presumably because of the reason that the price of shares fell from Rs. 55 per share to Rs. 5 per share, the assessee in its Income-tax return for the assessment year 200102 claimed deduction of Rs. 41,3....