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2010 (11) TMI 612 - AT - Income TaxClaim of loss from sale and purchase of shares / mutual fund units as expenditure - AO treated the same as speculative loss - Section 73 - fiction u/s 32(3) of UTI Act - whether UTI is a company - Held that:- Since the assessee has incurred this loss of Rs. 68,91828/- in delaying in units it cannot be considered as speculative. - Held that:- Explanation to Section 73 is attracted only when part of the business of the assessee company consists of purchase/sale of shares of other companies. Transactions in shares undertaken by the share brokers as its own under compulsion after client disowned part of such transactions did not constitute business of the assessee in share dealing and therefore loss incurred by the assessee in such transactions did not fall within the ambit of the section 73. Claim of bad debts - Held that:- the amount receivable by the assessee, who is a share broker, from his clients against the transactions of purchase of shares on their behalf constitutes debt which is trading debt. - it satisfies the condition stipulated in section 36(2)(i) and the assessee is entitled to deduction u/s 36(1)(vii) by way of bad debts after having written of the said debts from the books of account as irrecoverable.
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