TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 61
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....ive ground is ground no.1, which reads as under :- "That the Ld. CIT(A) erred in confirming the disallowance of Rs. 3,78,440/- out of total expenses of Rs. 4,57,450/- being amount debited under the head error and omission by holding that the said expenditure cannot be treated as revenue expenditure and cannot be allowed as business expenditure. That on the facts and circumstances of the case, the said amount was rightly claimed as allowable expenditure by the appellant and the disallowance thereof is wrong. It is prayed that the said addition may very kindly be deleted." 5. Briefly stated, the facts of the case are that the assessee is a member of National Stock Exchange. The main source of income of assessee is Brokerage, commission an....
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....rds balance amount of Rs. 79010/- we have vide our earlier replies have filed the detailed reply. " 6. The AO found that the assessee was not able to furnish any details or evidence in respect of the transactions wherein any profit/loss on wrong punching of order by the terminal order was booked. The AO treated the loss as speculative loss and the same was disallowed to the extent it was not set off against the speculation income of Rs. 65,463/- offered by the assessee. The net disallowance was calculated at Rs. 3,91,987/- ( Rs. 457450 (-) 65463) on this income and added back to the total income of the assessee. The assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) out of total expenses of Rs. 4,57,450/- disallowed the am....
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....d client stopped trading with the appellant and was also not making the payments of amounts due from him to the appellant. The said client lodged a claim of Rs. 7,58,150/- with the appellant in January 2004 itself, which was settled for Rs. 3,78,440/- and credit was given to the client on 10th March 2004 after which the client resumed trades and the appellant started earning brokerage, which amounted to Rs. 4,70,363/- in the immediately succeeding year, in addition to the brokerage earned during the impugned year. 3. As rightly observed by Your Honour that the brokerage income is the major income of the appellant. However, business claims cannot always be viewed within the strict barometer of resulting income. Thus, at times claims of am....
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....dable. Therefore claim of bad debts in the case of brokers has always been treated as regular revenue expenditure and not a capital expenditure. The claim of bad debts has been regularly allowed even in the case of the appellant in future years at the scrutiny assessment stage itself. The present case before Your Honour, in the alternate, can very be equated with the claim of bad debts. In view of the above submission it is requested that the claim of the appellant being that of a regular business expenditure/loss and is not in the nature of capital expenditure/loss, neither in the nature of speculation loss as held by the learned AO, the same may kindly be allowed." 8. The Ld. Counsel for the assessee contended that the assessee is a ....
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.... which settlement was agreed upon in March 2004 and the amount was claimed as expenditure / loss. The trades with this client were resumed from 15.03.2004. The assessee has earned brokerage from the said client immediately in the next year of Rs. 3,29,492/- in respect of F&O trade and brokerage of Rs. 1,40,870/- in respect of share trading. Thus, the assessee contended before the CIT(A) that as a result of settlement the said client continued the said relationship and the assessee was able to make good the loss suffered due to settlement with the client. It was also stated that if the assessee had not agreed to settle the issue the client would have stopped business and would have also created litigation which would have cost the assessee w....
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....r. Jagdish Jhawar. Mr. Jagdish Jhawar was suffering losses and was not providing requisite margin to the assessee. The assessee had to square off the existing outstanding trades of the client in which the client suffered losses. Since the assessee is in share business and looking to the future business prospects and in order to retain the client agreed to bear the loss to the extent of Rs. 3,78,440/- and claimed the same as expenditure. We find that the existing position of the client Mr. Jagdish Jhawar was squared off in January 2004 and to settle the matter and maintain trade relationship, the assessee had agreed to bear the loss on which settlement was agreed upon in March 2004 and the amount was claimed as expenditure/loss. We also find....