TaxTMI 
TaxTMI 
TaxTMI 
2013 (10) TMI 834
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....This is a second round before the Tribunal. We may begin by recounting the facts of the case. In the original proceedings, the Assessing Officer (A.O.) denied the assessee, a stock broker in the commodity market, and a registered member of two stock exchanges, being National Commodity & Derivatives Exchange Limited (NCDEX) and Multi Commodity Exchange (MCX), a claim for business loss in the sum of Rs.34,45,747/-. The same being on account of write off of debts owed to the assessee- company by its clients, was considered by the A.O. as not eligible for being claimed u/s. 36(1)(vii), as it is only the debt qua the brokerage charged by the assessee to its clients for the services rendered thereto that could qualify as a trade debt arising out ....
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....ce Rs.6,59,053/- being in relation to the previous year relevant to A.Y. 2005-06. He, therefore, allowed the assessee part relief, i.e., to the extent of the loss claimed relating to the current year (Rs.27.87 lacs) vide order dated 11.08.2009. In further cross appeals, the tribunal was of the view that the principles laid down by the Special Bench decision in the case of Shreyas S. Morakhia (supra) (since reported at [2010] 40 SOT 432 (Mum) (SB) [5 ITR (Trib) 1]), would apply. Accordingly, the matter was remanded back to the file of the A.O. to verify the claim as being in light with the said decision, vide order dated 12.01.2011 (in ITA No.5754/Mum/2009) and dated 26.08.2011 (in ITA No.5119/Mum/2009). In the set aside proceedings, the as....
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....ellant even failed to prove whether the same were ever routed through the books of accounts and appeared in the profit and loss account of the appellant for the relevant period. As per section 36(2) r.w.s 36(1)(vii), the bad debts written off are allowable to the appellant, but advances not being in the nature of debts are not allowed as deduction. The basic conditions for allowance of a writing off of such debt that it should be a debt given in normal course of business and which has become bad and subsequently written off in the books of accounts. In view of this, the grounds no. 4 to 6 are hereby dismissed." 3. We have heard the parties and perused the material on record, giving our careful consideration to the matter. In our view, the....
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....rst round (in ITA No.2231 of 2011 dated 27.02.2013). The party- wise details of the debts written off had in fact been already furnished during the course of the original proceedings vide letter dated 14.11.2008 (PB-I pgs.7-11). The write off is to the debit of the profit and loss account, with the corresponding credit to the sundry debtors a/c, as apparent from the relevant schedules to the balance-sheet as at the year- end, forming part of the assessee's return of income for the year. That the write off in accounts itself is sufficient for the claim of deduction u/s. 36(1)(vii) stands since settled by the apex court in T.R.F. Ltd. vs. CIT [2010] 323 ITR 397 (SC), unless of-course it is not bona fide (refer: Dy.CIT vs. Oman International B....
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..../margin deposit account, where unadjusted, stands reflected separately in the balance-sheet under the head current liability (Schedule VIII) to the balance sheet (PB-II pgs.8-25). In any case of the matter, there is nothing on record to show that the relevant contracts have not been squared up by the assessee prior to the year-end, and the gain or loss, as the case may be, arising thereon, being only on behalf of the client, adjusted in his account. Continuing further, even if regarded as a business loss, in our view, the assessee's claim merits acceptance. Rather, this would render superfluous the controversy, though since resolved by the jurisdictional high court in Shreyas S. Morakhia (supra), as to whether the debt under reference sati....