2018 (9) TMI 1961

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....42,194/-, written off. 2. Facts apropos are that assessee engaged in the business of developing and maintenance of shipyard had filed its return of income for the impugned assessment year declaring ''Nil'' income. During the course of assessment proceedings, it was noted by the ld. Assessing Officer that assessee had claimed bad debts of B2,02,42,194/-. Ld. Assessing Officer required the assessee to explain the claim of bad debt, since according to him in the preceding assessment year assessee had not made any claim for bad debt. Reply of the assessee was as under:- ''During the Assessment year we have incurred a Loss by way of Bad debts amounting to 2,02,42,194.10. The Bad debts has arisen on account of the following: ....

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....ch claim was disallowed. 4. Assessee's appeal before the ld. Commissioner of Income Tax (Appeals) was not successful. According to the ld. Commissioner of Income Tax (Appeals), sum of B2,02,42,194/- claimed as bad debt was not shown as part of assessee's income in any earlier years. As per the ld. Commissioner of Income Tax (Appeals) it was only part of the capital employed by the assessee towards its business activity. Thus, according to the ld. Commissioner of Income Tax (Appeals), loss incurred by the assessee was a capital loss and not a bad debt eligible for deduction u/s.36(1)(ii) of the Income Tax Act, 1961 (in short ''the Act'). 5. Now before us, the ld. Authorised Representative strongly assailing the orders of the lower auth....

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....Ltd during the relevant previous year. It is also not disputed that debt of B2,02,42,194/- became due to the assessee from the said exchange, on account of the commodity trading undertaken by the assessee during the relevant previous year. Observation of the ld. Assessing Officer with regard to the claim as it appears at page 3 of its order is reproduced hereunder:- ''It is pertinent to mention here that the Department has' received information from the National Spot Exchange that due to various reasons the trading on the exchange platform was stopped on 3pt July, 2013, and the NSE has to settle the outstanding receivables of the traders. The NSE also stated that the amounts recovered have been distributed to the brokers under ....