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2010 (10) TMI 208 - AT - Income TaxAddition of income - bad debts - section 36(1)(vii) - assessee accepted the arbitration award of BSE and NSE and written off the difference of outstanding less amount agreed to pay - Held that: - in order to satisfy the condition stipulated in section 36(2)(i), it is not necessary that the entire amount of debt has to be taken into account in computing the income of the assessee and it will be sufficient even if part of such debt is taken into account in computing the income of the assessee. This principle applies to a share broker. The amount receivable on account of brokerage is a part of debt receivable by the share broker from his client against purchase of shares and once such brokerage is credited to the P&L account and taken into account in computing his income, the condition stipulated in section 36(2)(i) gets satisfied. Whether the gross amount is reflected in the credit side of the P&L A/c or only the net amount is finally reflected as profit after deducting the corresponding expenses or only the net amount of brokerage received by the share broker is reflected in the credit side of the P&L account makes no difference because the ultimate effect is the same. Claim of bad debts allowed - decided in favor of assessee.
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