2013 (4) TMI 292

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....g the regular course of business. 2 On the facts and circumstances of the case, the ld Commissioner of Income Tax(Appeals) has erred by adding a sum of Rs.6,24,398/- u/s 14A of the I T Act 1961 without considering the facts of the case." 3 The assessee is a member of Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The assessee is dealing in shares & securities and also doing purchase and sale of shares on behalf of the clients and earned brokerage income. The assessee has debited a sum of Rs. 11,55,496/- under the head 'bad debts'. The Assessing Officer has disallowed the claim of the assessee on the ground that the assessee has failed to show the debt has become bad and further the debt being related to the clients of....

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....Tribunal has been upheld by the Hon'ble High Court. He has also relied upon the decision of the Hon'ble Delhi High Court in the caseof CIV vs Bonanza Portfolio Ltd reported in 320 ITR 178(Del). 4.1 The ld AR has further submitted that as per the amended provisions of section 36(1)(vii) the only requirement is that the assessee has written off the amount in the books of account as bad debts and the assessee is not required to establish that the debts has actually gone bad for claiming the amount as bad debt in view of the decision of the Hon'ble Supreme Court in the case of T. R. F. LTD. v. Commissioner of Income-tax reported in 323 ITR 397(SC). The ld AR has thus submitted that the amount claimed by the assessee as bad debt against these p....

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.... under: "14. The value of the shares transacted by the assessee as a stock broker on behalf of its client is as much a part of the debt as is the brokerage which is charged by the assessee on the transaction. The brokerage having been credited to the profit and loss account of the assessee, it is evident that a part of the debt is taken into account in computing the income of the assessee. The fact that the liability to pay the brokerage may arise, as con- tended by the Revenue, at a point in time anterior to the liability to pay the value of the shares transacted would not make any material difference to the position. Both constitute a part of the debt which arises from the very same transaction involving the sale or, as the case may be, ....