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2016 (6) TMI 338 - GUJARAT HIGH COURT

2016 (6) TMI 338 - GUJARAT HIGH COURT - TMI - Short deduction of tax at sources - disallowance of bad debts - ITAT deleted the addition as done by CIT(A) - Held that:- As pointed out the assessee had purchased the aforesaid shares on behalf of the sub-broker and, in fact, paid the amount of ₹ 1,06,10,247/-. As against this amount, he received only a sum of ₹ 64 lakhs. The brokerage which was received in the aforesaid transaction was shown as income by the assessee in the previous yea .....

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n of the CIT (Appeals) that the judgment of the Delhi High Court in Commissioner of Income-Tax vs. D.B.(India) Securities [2009 (7) TMI 894 - DELHI HIGH COURT] wherein held that as the assessee had not sold the shares to anybody else in the market and in the absence of such a sale, the assessee could not claim the aforesaid amount as “bad debt”. - Decided against revenue - TAX APPEAL NO. 378 of 2016 - Dated:- 6-6-2016 - MR. AKIL KURESHI & MR.A.J. SHASTRI JJ. For the Appellant. Mrs .....

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a) rightly invoked by the AO for short deduction of tax at sources ? 2. Brief facts are that the assessee who is a share broker had claimed bad debt for a sum of ₹ 2.57 crores (rounded of) arising from downfall under Section 143(2) of the Income Tax Act, 1961 (t the Act for short). The case of the assessee was that he suffered such loss due to heavy down fall in the share market in January, 2008, as a result of which, the wealth of share investors had vanished. They were not in .....

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submitted that this issue is covered in its favour by the decision of ITAT special bench Mumbai in the case of Shreyas s Morakhia, 40 SOT 432 and also Delhi High Court decision in the case of DB Securities Ltd. 318 ITR 46. The decision of Delhi High Court is final on the issue since SLP filed by the Department is dismissed by the Supreme Court. I have gone through the decisions in which such debts are held as allowable. In the immediate preceding year, CIT(A) has allowed the appellant's clai .....

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and having perused the documents on record, we are in agreement with the view of the CIT(Appeals) when it refers to the case of the Delhi High Court in the case of Commissioner of Income-Tax vs. D.B.(India) Securities reported in 318 ITR 26 and places reliance on it. In the said decision, the Division Bench of the High Court considered a situation where the assessee was a member of the Delhi Stock Exchange and was engaged in the business of share and stock broking. The assessee had purchased sha .....

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