2017 (5) TMI 370

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....d/2011 for AY 2007-08, the Revenue has preferred the present Tax Appeal with the following proposed questions of law. "(1) Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in deleting the disallowance of deduction u/s 40(a)(ia) of Rs. 76,09,141/-? (2) Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in deleting the disallowance of deduction u/s 14(A) of Rs. 2,10,788/- ? (3) Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in deleting the disallowance of deduction of Bad Debts of Rs. 12,00,000/- ?" [2.0] Having heard Shri Manish Bhatt, learned Counsel appearing on behalf of the Revenue and Shri....

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....s and until the requirement under section 36(2) of the IT Act are satisfied and/or fulfilled and in the earlier years the amount paid by way of bad debt was offered for taxation, the assessee shall not be entitled to the deduction of such bad debts. [4.1] The aforesaid issue is now not res integra in view of th   decision of the Bombay High Court in the case of Commissioner of Incometax vs. Shreyas S. Morakhia reported in (2012) 343 ITR 225 (Paras 7 & 10). In paras 7 & 10, the Bombay High Court has observed and held as under: "7. Now, under Section 36(1)(vii), the amount of any bad debt or any part thereof which is written off as irrecoverable in the accounts of the assessee for the previous year is to be allowed as a ....

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....gages in transactions of sale and purchase of shares for his clients. The bill raised on the client reflects the rate, quantity and total value of the shares transacted as well as the brokerage, apart from the Security Transaction Tax and the service tax. The brokerage from the transaction of the purchase of shares has been taxed in the hands of the assessee as its business income. Once that is so, it is evident that within the meaning of Section 36(2)(i) the debt or part thereof has been taken into account in computing the income of the assessee. The debt comprises, inter alia, of the value of the shares transacted and the brokerage payable by the client on whose behalf the transaction takes place. The brokerage as well as the value of the....