TaxTMI 
TaxTMI 
2019 (1) TMI 1762
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.... disallowance of Bad Debts written off of Rs. 48,00,000/- on the ground that allowability of Bad Debts u/s 36(1)(vii) r.w.s. 36(2) is limited to the head of income from business and profession even though such amount earlier taxed as a capital gain. 3. To adjudicate on this appeal, only a few material facts need to be taken note of. The assessee before us is engaged in the business of manufacturing of dye intermediates and fine chemicals. During the course of the assessment proceedings, the Assessing Officer noted that the assessee has claimed bad debts of Rs. 48,00,000/-. It was further found that the bad debts is claimed in respect of claim of certain shares through M/s. Pravin Ratilal Shares & Stock Brokers Pvt Ltd as the broker had not....
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....in the P & L A/c. The A.O. has rightly enquired from the assessee to explain the details relating to the said bad debt with documents reflecting that the same was taken into account while computing the income to that particular year. The A.O. has further gone into details of computation of income from A.Y 1999-2000 till A.Y.2001-02 i.e. the period in which the appellant has claimed to have debited the account of Pravin Ratilal Shares and Stock Brokers Ltd. by crediting the sale of shares. According to the appellant, after deducting the cost of investment in respect of shares sold the profit has been credited to P&L A/c. Therefore, the amount of claim of bad debt has been credited to the P&L A/c of the respective year. The A.O. on analysing ....
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....in computing income of earlier yearn and there is no mention of head of income in which bad debt written off is to be considered as income. I disagree with the contention of the appellant. The bad debt can be written off only in respect of a debt relating to the computation of income under the head of Income from business and profession. Capital loss is not deductable as business loss. It has been held in the case of Bluechip Business Centre Pvt Ltd vs. ITO (2014) 149 ITD 354 (Mumbai) Tribunal that capital loss cannot be claimed as deductible as business loss. Accordingly, the addition made on disallowance of bad debt written off of &s. 48 lacs is hereby confirmed and the ground off appeal is dismissed." 5. The assessee is not satisfied ....