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2009 (8) TMI 636 - HC - Income TaxBad Debts- The assessee was in the business of share broking. The brokerage received by the assessee was shown as income in his books of account of the immediate previous year. Since the balance amount to the extent of Rs. 50,30,491 could not be received from the client on whose behalf the shares were purchased the assessee during the year wrote off the sum as bad debt. Admittedly, the amount could not b recovered and became bad. The Assessing Officer disallowed the claim of bad debt on the ground that the conditions for the allowability of the amount as bad debt as stipulated in section 36(1)(vii) read with (2) were not satisfied. This was confirmed by Commissioner (Appeals). The Tribunal allow the claim. Held that- since the brokerage payable by the client was a part of the bed debt had been taken into account in the computation of the income, the conditions stipulated in section 36(1)(vii) and (2) stood satisfied.
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