2015 (10) TMI 1011

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....bunal erred in holding that the loss of the assessee incurred in the sum of Rs. 5.30 crore through forfeiture of its hare application money for the shares of M/s. Essar Oil Limited upon failure to pay the call money pertained to capital account in disregard of the fact that the acquisition of shares, stocks, bonds, debentures and debenture stock is integral part of the assessee's ordinary business opereation as a non-banking financial company ? It appears from the facts that the appellant, a non-banking financial company, for the financial year 1999-2000, relevant assessment year 2000-2001, had written off a sum of Rs. 5,56,24,296/- which included part payment of Rs. 5.30 Crores paid towards the purchase of shares of M/s. Essar Oil Limit....

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....r and mere written off of the amount of bad debt is sufficient as held by Gujarat H.Court in the case of Girish Bagwat Prasad cited in 256 ITR 772. Similar view was held by Chennai Tribunal reported in 74 ITD 469/69 TTJ (Chennai) 410 in the case of New Finance and Investment Pvt Limited. In my view, treating the forefeited part payment as capital loss will not be justified as per law. The AO is accordingly directed to treat the same as bad debt or business loss." The revenue, being aggrieved, preferred appeal before the Tribunal. The Tribunal allowed the appeal by holding, inter alia, as follows : "We have heard the rival parties and perused the material available on record. The Ld.C.I.T.(A) has treated the loss as bad debit and....