TMI Blog2012 (7) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 41,37,881/- is to be treated as debt. As shares remained in the possession of the assessee he could sell the said shares for whatever consideration it could fetch and it would be adjusted against the balance amount of Rs. 41,37,881/- payable by the debtor, i.e. the sub broker - in favour of assessee for statistical purposes. - ITA NO. 3831/Del/2004 - - - Dated:- 15-6-2012 - SHRI R.P. TOLANI, AND SHRI SHAMIM YAHYA, JJ. Assessee by : Sh. Sanat Kapoor, Adv. And Sh. Vikas Jain, Adv. Department by : S h. S.K. Upadhyaya, Sr. D.R. ORDER PER SHAMIM YAHYA: AM This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XIII, New Delhi dated 29.7.2004 pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of business and the same was taken into account in computing the income of the appellant company of earlier years. iv) That when the appellant company wrote off Rs. 41,73,881.00 due from "Glory Securities Ltd." as "Bad Debts" in its accounts for the period 01.04.2000 to 31.03.2001, it had complied with the provisions of section 36(1)(vii) of the Act, and the Authorities below erred when they did not allow this loss in computing the income of the appellant company for the Astt. Year 2001-2002. v) That the Authorities below have erred in holding that the claim of the appellant company is not genuine and is fishy, and there is no basis justifiable in law for the Authorities below to reach this conclusion. vi) That in the alternative Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the asstt. Year 2001- 02 claimed deduction of Rs.41,37,881/- as bad debt u/s. 36(1)(vii) of the IT Act. This deduction was initially disallowed by the AO, but it was affirmed by the Ld. CIT(A). The matter travelled to the ITAT and ITAT vide order dated 8.9.2006 allowed the deduction of the amount mentioned above. Revenue contested the above ITAT order before the Hon ble High Court. The Hon ble High Court in ITA No. 415/2007 vide order dated 2.7.2009 dealt with the Revenue s contention as under:- Learned counsel for the Revenue, in this appeal filed against the aforesaid order, has canvassed two submissions:- (1) The aforesaid amount could not be treated as 'debt' at all under the provisions of Section 36(2) of the Act and, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it could fetch and that was to be adjusted against the balance amount of Rs. 41,37,881/- payable by the debtor, i.e. the subITA broker, to the assessee, before arriving at the actual figure of bad debt. This aspect has not even been looked into by the ITAT in its impugned order. For this reason, we set aside the order passed by the ITAT and remit the case back for fresh consideration after taking account the aforesaid aspects of the matter. 3.2 Accordingly, the matter was heard by us. 4. We have heard the rival contentions in light of the material produced and precedents relied upon. We find that as per the above exposition of the Hon ble High Court, the impugned amount can be treated as debt. However in quantifying the said debt th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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