2014 (5) TMI 348

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....n of income for A.Y. 08-09 on 26.09.2008 declaring total income of Rs. 2,41,73,230/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 30.11.2010 and the total income was determined at Rs. 2,68,73,880/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) vide order dated 01.05.2011 partly allowed the appeal of the Assessee. Aggrieved by the order of CIT(A), the Revenue is now in appeal before us and the grounds raised by the Revenue reads as under:- 1. The ld. CIT(A) erred in law and on facts in deleting the disallowance of Rs. 15,85,238/- made by the A.O on account of bad debts. 4. Assessee has also filed a C.O. which is basically in support of....

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....e of Shreyas S. Morakhia 40 SOT 432. He accordingly deleted the disallowance. Aggrieved by the order of CIT(A), the Revenue is now in appeal before us. 6. Before us, the ld. D.R. relied on the order of A.O. and also placed reliance on the decision of Bombay Tribunal in the case of G.R. Pandya Share Broking Ltd. vs. ITO (2008) 26 SOT 431 (Mum). He also placed reliance on the decision in the case of Vinodiram Balchand and Company vs. CIT(2001) 251 ITR 819 (MP) and placed on record the copy of the aforesaid decisions. The ld. A.R. on the other hand reiterated the submissions made before A.O and CIT(A). He further placed reliance on the decision of Hon'ble Delhi High Court in the case of CIT vs. Bonanza Portfolio ITA No. 269/Ahd/2009 order dat....

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....sed above, we are of the view that the amount receivable by the assessee, who is a share broker, from his clients against the transactions of purchase of shares on their behalf constitutes debt which is a trading debt. The brokerage/commission income arising from such transactions very much forms part of the said debt and when the amount of such brokerage/commission has been taken into account in computation of income of the assessee of the relevant previous year or any earlier year, it satisfies the condition stipulated in section 36(2) (i) and the assessee is entitled to deduction u/s 36(l)(vii) by way of bad debts after having written of the said debts from his books of account as irrecoverable. We therefore, answer the question referred....