TaxTMI 
TaxTMI 
2021 (5) TMI 1051
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....ng at National Spot Exchange, as well rejection of alternate claim of allowing irrecoverable bad debts as 'business loss' under section 28(1)/37(1) of the Income Tax Act, 1961 (in short 'the Act'). 3. Shri. Mihir Naniwadekar appearing on behalf of the assessee narrating facts of the case submitted that: The assessee was engaged in trading of various commodities at National Spot Exchange Ltd. (in short 'the NSEL'). The trading at NSEL was abruptly stopped by the Government in July 2013. Due to sudden closure of trading, the assessee could not recover outstanding payments to the extent of Rs.1,26,61,739/- from the brokers. In the impugned assessment year the assessee wrote off irrecoverable amounts as bad debts. The assessee has written off ....
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....annot be allowed as bad debts, the same be allowed as business loss under section 28(1) of the Act. To support his alternate contention, the ld. Authorized Representative of the assessee placed reliance on the decision in the case of Chaudhary Associate vs. ACIT, 117 taxamann.com 840 (Del). 4. Ms. Usha Gaikwad representing the department vehemently defended the impugned order and prayed for dismissing the appeal of assessee. The ld. Departmental Representative submitted that in the case of A.U Financial India Ltd. (supra) the Tribunal has held the transactions at NSEL are speculative. 5. We have heard the submissions made by rival sides and have examined the orders of authorities below. The short point involved in present appeal is: Wheth....
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.... of Tribunal in the case of AU Financers (India) Ltd. (supra) would not support the cause of Revenue, unless it is proved that the transactions are speculative in nature. The second decision on which the CIT(A) has placed reliance is Omni Lens (P.) Ltd. (supra). We find that in the said case, in principle the Tribunal agreed with the contention of assessee in allowability of claim of write off of bad debts. Since, the transaction of purchase and sale with respect to actual delivery were not examined by the authorities below, the Tribunal remitted the matter back to the file of Assessing Officer to ascertain whether transactions were backed by actual delivery before allowing the claim of write off of bad debts. The Tribunal no where observe....
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....ational P. Ltd. vs. DCIT in ITA No.59/Cheny/2018 decided on 05/09/2018, under somewhat similar set of facts where the assessee therein had claimed write off of bad debts in respect of transactions at NSEL, the Assessing Officer rejected assesses claim being premature, the Tribunal allowed the claim of assessee. Similar view was taken by Indore Bench of the Tribunal in identical set of facts in the case of Mohan Jain vs ITO in ITA No.605/Ind/2017 for AY2014-15 decided on 05/2/2019. 10. We observe that there is discrepancy in quantum of claim of write off of debts before the Assessing Officer and the CIT(A). Taking into consideration entire facts, we deem it appropriate to restore this issue back to the file of Assessing Officer for examinin....