Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 206 - AT - Income TaxAddition on account of bad debts - condition laid down in section 36(2) of the Act was not satisfied - Held that:- Identical ground of bad debt was raised in appeal for AY 20010-11 where the issue was decided in favour of the assessee by deleting addition made on account of disallowance of bad debts. Since similar bad debts were allowed in earlier year, showing consistency the ld. CIT(A) gave relief to the assessee. As decided in SHRI SHREYAS S. MORAKHIA [2012 (3) TMI 103 - BOMBAY HIGH COURT] the requirement which has been imposed by Parliament in Section 36(2)(i) is that a deduction on account of a bad debt can be allowed only where such debt or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of the debt is written off - The brokerage having been credited to the profit and loss account of the assessee, it is evident that a part of the debt is taken into account in computing the income of the assessee - Since both form a component part of the debt, the requirements of Section 36(2)(i) are fulfilled where a part thereof is taken into account in computing the income of the assessee - Decided in favor of the assessee. Disallowance on account of loss on trading - AO disallowed it treating the same as speculation loss as per section 73 - Held that:- The loss claimed by the assessee does not fall within the purview of section 73 of the Act. On the identical issue the decision of Ahmedabad ITAT in the case of ITO vs. Rajvi Securities Pvt. Ltd. [2012 (4) TMI 207 - ITAT AHMEDABAD] supports the contention of the assessee - Decided against revenue Addition on account of prior period expenses - such expenses are to be considered in the year in which it pertains - Held that:- CIT(A) was of the opinion that the assessee has rightly claimed the said expenditure in the year under consideration as it was crystallized in the year under consideration only and also it is following the said accounting practice consistently. Accordingly, the disallowance made by the Assessing Officer was deleted by the ld. CIT(A).- Decided against revenue
|