TaxTMI 
TaxTMI 
2012 (12) TMI 487
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.... determined under section 1 15JB should be made for the purpose of determining applicability of the provisions of section 1 15JB on gross before allowing rebate u/s. 88E of the Act. 3 Ground number 1 is regarding disallowance of claim of bad debts amounting to Rs. 1, 24, 683/-. 3.1 The Assessing Officer disallowed the claim of write off of bad debts amounting to Rs. 1,24,683/-on the ground that the amount is not covered by section 36 (2) being the value of stock was not trading debt of the assessee. 3.2 On appeal, the CIT(A) allowed the claim of the assessee by following the order of this Tribunal in assessee's own case for the assessment year 2000-02 and 2004 - 05. 4 We heard the learned DR as well as the ld AR of the assessee and considered the relevant material on record. At the outset, we note that this Tribunal in assessee's own case for the assessment year 2004-05 vide order dated 22.6.2009 in ITA no 3380/Mum/2008 has considered and decided the identical issue in paragraphs 7 & 7.1 as under: "7 We have heard the learned representative or the parties and record perused as well as gone through the decisions cited by the learned representatives The Assessing Officer m....
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....ngly, made disallowance of Rs.. 10,69,943/-. 5.2 On appeal, the CIT(A) allowed the claim of the assessee by following the order of this Tribunal in case of Edelweiss Capital Ltd in ITA no 5324/Mum/2007. 6 We have heard the ld D.R. as well as the learned A.R of the assessee and considered the relevant material on record. We note that an identical issue has been considered and decided by this Tribunal in case of Edelweiss Capital Ltd vs ITO vide order dated 10th Nov 2010 in ITA no. 5324/Mum/2007 wherein this Tribunal has held in para 7 and 8 as under: "7. We have considered the facts and the rival contentions. In the Schedule annexed to and forming part of the Balance Sheet and Profit & Loss Account for the year under appeal (page 13 of the Paper Book), the assessee has made the following Note: - "H. Equity Futures - Index / Stock (a) "Initial Margin - Equity Derivative Instruments", representing initial margin paid, and "Margin Deposits", representing additional margin over and above initial margin, for entering into contracts for Equity Index / Stock Futures, which are released on final settlement / squaring-up of underlying contracts, are disclosed under Loans and Advances. (....
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....w generally accepted as an established rule of commercial practice and accountancy". This is what the Supreme Court held in the case of Chainrup Sampatram vs. Commissioner of Income Tax, West Bengal (1953) 24 ITR 481 (SC), speaking through Hon'ble Justice Patanjali Sastri, the then Chief Justice of India (page 485 - 486 of the Report). At page 486 the Supreme Court further observed that "loss due to a fall in price below cost is allowed even if such loss has not been actually realized". Quoting from the case of Whimster & Co. vs. Commissioners of Inland Revenue (1926) 12 Tax Cases 813, the Supreme Court observed that the profits that are chargeable to tax are those realized in the year and that an exception is recognized where a trader purchased and still holds goods which are fallen in value in which case though no loss has been realized nor it has occurred, nevertheless at the close of the year he is permitted to treat these goods as of their market value. This decision of the Supreme Court governs the facts of the present case. It is to the assessee's strength that the Institute of Chartered Accountants of India in its guidelines have also approved of the rule of prudence which ....
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....lowing the decision of Bangalore benches of the Tribunal in case of M/s Horizon Capital Ltd vs ITO . 9 We have heard the ld D.R. as well as the learned A.R. of the assessee and considered the relevant material on record. The learned A.R. of the assessee has pointed out that this issue is covered by the decision of Karnataka High Court in case of CIT vs M/s Horizon Capitals Ltd whereby the decision of the Bangalore benches of the Tribunal has been upheld. He has further submitted that an identical issue was also considered and decided by the Kolkata Benches of this Tribunal in case of ITO vs Advent Stock Broking P t Ltd. 9.1 On the other hand the learned not D.R. has relied upon the order of the Assessing Officer. 9.2 Having considered the rival submissions and relevant material on record, we note that the honourable Karnataka High Court in case of CIT vs M/s Horizon Capitals Ltd in ITA number 434 of 2010 vide decision dated 24th October 2011 held in paragraph 15 to 17 as under: 107 of paper book. "15. Under Section 88E, where the total income of an assessee in a previous year includes any income, chargeable under the head "Profits and gains of business of profession", ar....