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TMI Blog2015 (10) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee incurred in the sum of Rs. 5.30 crore through forfeiture of its hare application money for the shares of M/s. Essar Oil Limited upon failure to pay the call money pertained to capital account in disregard of the fact that the acquisition of shares, stocks, bonds, debentures and debenture stock is integral part of the assessee's ordinary business opereation as a non-banking financial company ? It appears from the facts that the appellant, a non-banking financial company, for the financial year 1999-2000, relevant assessment year 2000-2001, had written off a sum of Rs. 5,56,24,296/- which included part payment of Rs. 5.30 Crores paid towards the purchase of shares of M/s. Essar Oil Limited and forfeited on account of the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficient as held by Gujarat H.Court in the case of Girish Bagwat Prasad cited in 256 ITR 772. Similar view was held by Chennai Tribunal reported in 74 ITD 469/69 TTJ (Chennai) 410 in the case of New Finance and Investment Pvt Limited. In my view, treating the forefeited part payment as capital loss will not be justified as per law. The AO is accordingly directed to treat the same as bad debt or business loss." The revenue, being aggrieved, preferred appeal before the Tribunal. The Tribunal allowed the appeal by holding, inter alia, as follows : "We have heard the rival parties and perused the material available on record. The Ld.C.I.T.(A) has treated the loss as bad debit and business loss. One of the conditions in respect of bad debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. According to him, the character of the transaction has to be looked into. We find that there is some force in the argument made by Mr.Bagchi. As we find that none of the authorities - the Assessing Officer, CIT(A) and the Tribunal had occasion to deal with the provisions contained in the Residuary Non-Banking Companies (Reserve Bank) Directions, 1987 which has been relied on behalf of the appellant, the order under challenge cannot be sustained and is set aside and quashed. Accordingly, the matter is remanded before the Assessing Officer who shall pass necessary order within four months from the date of presentation of a copy of the certified copy of this order after giving an opportunity of hearing to the assessee. At the time of h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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