2018 (7) TMI 2009

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ding in shares and securities. We shall first take up the appeal filed by the assessee. The first issue relates to the disallowance of claim of bad debts of Rs. 456.62 lakhs. The AO disallowed the same by holding that the amount claimed as bad debts was not offered as income in the earlier years as stipulated in sec. 36(2) of the Act. The Ld CIT(A) noticed that the bad debts claim pertained to the amount due to the assessee on account of purchase transactions of shares of customers, which was held to be allowable as deduction by Mumbai Special bench in the case of Shreyas Morarkhia (ITA No.3374/M/2004 dated 10-01-2010). The Ld CIT(A) noticed that the bad debts claim of the assessee included amount due from sister concerns amounting to Rs. 7....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... account shows that the bills raised by the assessee against them for purchase and sale of shares. Accordingly we notice the transactions with the sister concerns were regular business transactions. The Ld A.R submitted that the sister concerns, being franchisees of the assessee's share broking business, could not repay the debts due to heavy losses incurred by them. The contention of the Ld A.R could not be controverted by the Ld D.R. In this view of the matter, we are of the view that there is no reason to doubt the genuineness of claim. Accordingly we modify the order passed by Ld CIT(A) and direct the AO to allow the claim of Rs. 71.38 lakhs, referred above. 5. The next issue relates to the disallowance of claim of Rs. 11,469/-. The ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....2005-06 (ITA No.76/Mum/2009 dated 25-04-2012). The Tribunal has come to the conclusion that the assessee could not do the business for the reasons beyond its control, i.e., because of the ban imposed on its trading by SEBI and the order so passed by SEBI has been challenged by the assessee. Following the order passed by the Tribunal in AY 2005-06 (which is an order pertaining to the year subsequent to AY 2003-04), we direct the AO to allow carry forward of business loss and unabsorbed depreciation. 8. The next issue relates to the disallowance made u/s 14A of the Act. The assessee had received dividend income of Rs. 83,314/-. The Assessee did not make any disallowance and the AO also did not examine the same. The Ld CIT(A) directed the A....