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TMI Blog2013 (12) TMI 865X X X X Extracts X X X X X X X X Extracts X X X X ..... f bad debts. Briefly stated the facts of this ground are that the assessee, a stock broker, claimed certain deduction on account of bad debts. The Assessing Officer restricted the allowance to the extent of brokerage which passed through profit and loss account amounting to Rs. 19,00,789. The remaining amount of Rs. 20,05,328 was disallowed. The learned CIT(A) deleted the disallowance. 3. After considering the rival submissions and perused the relevant material on record we find that in principle the question of bad debt in the hands of stock broker stands settled in assessee's favour by the judgment of the Hon'ble Delhi High Court in CIT Vs. D.B. (India) Securities [(2009) 318 ITR 26 (Delhi)] holding that the unrecovered amount by the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concede that this issue needs to be decided against the assessee in view of the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. Kotak Securities Limited [(2012) 340 ITR 333 (Bom.)]. In view of the candid admission by the learned AR, we set aside the impugned order on this issue and restore the addition made by the Assessing Officer. 5. The only issue in the assessee's cross objection is against sustenance of the above addition of Rs. 98,198 u/s 40(a)(ia) on the ground that no amount was outstanding at the end of the year and hence the disallowance could not have been made u/s 40(a)(ia). This ground is based on the majority view of this Special Bench decision in Merilyn Shipping and Transports. The ld. AR was fair en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Export Syndicate and the Hon'ble High Court was pleased to disapprove the view taken by the special bench after considering the very same order. It is further noted that the Hon'ble Calcutta High Court has reiterated the same view vide its judgment dated 4.4.2013 in CIT VS. Md. Jakir Hossain Mandal. It is still further relevant to note that the Hon'ble Gujarat High Court, vide its judgment dated 9.5.2013, in a series of cases led by CIT VS. Sikandarkhan N. Tunvar has disproved the special bench order in the case of Merilyn Shipping (supra). 7. The ld. AR has relied on the judgment dated 9.7.2013 rendered by the Hon'ble Allahabad High Court in CIT VS. Vector Shipping Services (P) Ltd. to contend that in this case a view favourable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before it in above terms, the Hon'ble High Court incidentally noticed that for disallowing expenses from business and profession on the ground that tax has not been deducted, the amount should be payable and not which has been paid by the end of the year. These passing remarks, which are only obiter dicta, seem to have been made because the tribunal in the impugned order before the Hon'ble High Court, apart from deleting the disallowance on the ground that M/s Mercator Lines Limited had deducted TDS on salaries paid by it on behalf of assessee. Under such circumstances assessee was not required to deduct TDS on reimbursement being made by it to M/s Mercator Lines Limited.', also referred to the special bench decision in the case of Merilyn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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