TaxTMI 
TaxTMI 
2012 (3) TMI 544
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....law, the Commissioner of Income Tax Appeals VIII Mumbai has confirmed the treatment adopted by the Assessing Officer in respect of the gains of Rs..69,56,813/- arising from the sale of shares/units, the transactions whereof were entered through recognized stock exchange as business income instead of short term capital gain and thereby levying tax at the rate of 30% instead of concessional rate of 10% as eligible under section 111A of the Income Tax Act, 1961". 2. In the course of the proceedings the assessee has also raised an additional ground which is as under: "On the facts and circumstances of the case and in law the Appellant shall be allowed to adjust the deemed speculation loss determined under explanation 2 Section 73 of the Income Tax Act, 1961 for the earlier periods against the current income under share trading account determined as business income arising from the transaction in shares". 3. We have heard the learned Counsel Shri Nitin Joshi and the learned Departmental Representative Shri Dipak Ripote in detail. 4. Ground No.1: This ground has two components. Ground No.1.1: Bad Debts. The assessee claimed bad debts to the tune of Rs..13,70,139/- in the Profit & Lo....
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....part thereof which was written off as irrecoverable in the accounts of the assessee has to be allowed as deduction in computing the income under section 28. In view of the judgment of the Hon'ble Supreme Court in the case of TRF Ltd vs. CIT 323 ITR 397 (SC), it is now settled position of law that after 1st April, 1989 it is not necessary for the assessee to establish that the debt has become irrecoverable and it would be sufficient if it is written off as irrecoverable in the accounts of the assessee. Therefore, the Assessing Officer's contention that the assessee has not proved that the debt has became bad does not survive as the law has been amended to allow the bad debts once it is held as irrecoverable and written off. As far as the amounts written off of depository receipts of Rs..5,26,505/- and WDM of Rs..1,73,119/- these are stated to be the charges recoverable which are offered as income in the earlier years. Even though the assessee has submitted the same, AO has not considered this aspect. Amounts to the above extent certainly satisfies the conditions under section 36(2) as income was offered as receivable in an earlier year which was subsequently not recovered and th....
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....t were made as per the terms and conditions and they were paid for the services rendered overseas which were not utilized in India. It was further submitted that the said concern does not have any PE in India. Therefore, no part of income payable to them is liable to tax in India. Hence no TDS was made while effecting the payments to them. The assessee relied upon the decision of the ITAT, in the case of Venkat Shoes Pvt Ltd, Madras (citation not mentioned in order).The CIT (A) however, without examining the merits of the case upheld the action of the Assessing Officer by stating as under: "4.2 It is not for the appellant to decide whether the income is taxable in India or not. The appellant should have made application before the Assessing Officer and obtained approval under section 195(2) of the Income- Tax Act. The appellant made no application to the Assessing Officer under section 195 and on its own decided not to deduct TDS which is clear violation of section 195 of the Income Tax Act as has been held in case of Samsung Electronics 320 ITR 209 by the Karnataka High Court that it is not open to payer to argue that the payment does not result in taxable income in the hands of....
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.... we set aside his order to that extent and restore the issue in Ground No.1.2 to the file of the CIT (A). Ground No.1.2 is considered as allowed for statistical purposes. 13. With reference to Ground No.2, the learned Counsel submitted that the gains arising out of sale of shares/units are treated as business income instead of short term capital gain. It was submitted that in the earlier years the assessee had suffered losses on the same account and the Assessing Officer treated as speculation loss by virtue of invoking the provisions of section 73 explanation (2) and therefore, the assessee has raised the additional ground that in case the amounts are treated as speculation business, the same is required to be set of to the losses determined by the Assessing Officer in the earlier years. He referred to the submissions before the Assessing Officer vide letter dated 25/02/2008, more so Item No.24 to submit that an amount of Rs..73,79,000/- and Rs..35,93,025/- were disallowed being loss incurred in share trading as deemed speculation loss in assessment years 2001-02 and 2002-03. It was further submitted that by applying the same principles the assessee requested the Assessing Office....