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2013 (12) TMI 865 - AT - Income TaxDeletion on account of bad debts AO restricted the brokerage passing through profit and loss account Held that:- Following CIT Vs. D.B. (India) Securities [2009 (7) TMI 894 - DELHI HIGH COURT] the unrecovered amount by the share broker on behalf of its sub-broker has to be treated as debt and deduction is allowable - the shares remaining in the possession of the assessee can be sold in the market for whatever consideration and adjusted against the balance outstanding payable by the debtors and the net figure which results thereafter, has to be allowed as bad debt. Further in DCIT Vs. Shreyas S.Morakhia [2010 (7) TMI 455 - ITAT MUMBAI] - the sum receivable by share broker from clients for transactions undertaken on their behalf is a trading debt - Unrecovered part has to be allowed as deduction Thus, the assessee is entitled to deduction in respect of the amount becoming unrecoverable from its clients - the deduction has to be restricted to the amount determined after reducing the sum recoverable from sale proceeds of shares with assessee, if any Order set aside and the matter remitted back to the AO for fresh adjudication decided against Revenue. Deletion of disallowance on account of Transaction charges Held that:- Following CIT v. Kotak Securities Limited [2011 (10) TMI 24 - Bombay High Court] The transaction charges paid by the assessee constitute 'fees for technical services' covered under Section 194J of the Act Thus, the assessee was liable to deduct tax at source while crediting the transaction charges order set aside and the matter remitted back to the AO Decided in favour of Revenue. Addition u/s 40(a)(ia) of Income Tax Act Assessee contended that no amount was outstanding at the end of the year Held that:- Following CIT v. Crescent Export Syndicate [2013 (5) TMI 510 - CALCUTTA HIGH COURT] - unless the amount is payable at the end of the year, no disallowance can be made u/s 40(a)(i) of the Act - there is no merit in the ground raised by the assessee in its cross objection Decided against Assessee.
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