TMI Blog2017 (5) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of accounts and found out any discrepancies with respect to the claim of the assessee, the disallowance in the hands of the assessee is not warranted only on the pretext of the lame finding of the Revenue that the details with respect to the claim of deduction is not provided - Decided in favour of assessee. Addition u/s 14A read with Rule 8D - Held that:- The assessee has not convinced the Revenue authorities with respect to the expenses attributable for earning exempt income by apportioning all such expenses. Therefore the Revenue has no other option but to compute the disallowance in accordance with Rule 8D of the Rules. Moreover the Ld.AO has only invoked Rule 8D(iii) of the Rules and thereby computed the disallowance at ₹ 62,904/-, on which we are of the view that no interference is necessary in the order of the Revenue authorities. However at the same time we find that the Ld.AO has stated in his order that the disallowance U/s.14A is to be made for ₹ 2,23,019/- It appears there is a mistake in the order of the Ld.AO. Therefore we hereby correct the order of the Ld.AO by sustaining the addition at ₹ 62,904/- towards disallowance U/s.14A r.w.r 8D of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2012) reported in 19 taxmann.com 64 (Bom), wherein it was held that the sale consideration of such shares should be reduced from the cost of shares purchased where payment has not been received and the balance shall be claimed as bad debts. Thereafter the Ld.AO pointed out the following discrepancies:- i. The assessee had not provided a clear break-up of brokerage income and cost of the scripts against which payment was not received. ii. The break-up of bad debts relating to brokerage income and bad debts relating to purchase of shares against which payment was not received, was not produced. iii. Some of the parties against whom bad debts were claimed relating to purchase of shares against which payments were not received, gave contradictory statements viz.:- a) Shri P.S. Kathirvel against whom bad debts of ₹ 29,193/- was written off stated that he did not have any knowledge about the share transaction made in his name. b) Shri R. Sivasankar against whom bad debts of ₹ 12,061/- was written off stated that the assessee company had adjusted such loss from the salary of the employees who had allegedly traded in shares without the knowledge of the clien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required vided specific notice dated 08.03.2013. In view of the specific facts brought on by the AO, the plea of the AR of the appellant to cross examine the parties is rejected. I find that the plea of the AR of the appellant to cross examine the parties is only delaying tactic to mislead the revenue. No affidavit was also made by the parties denying the contents of the statements made before the AO. Under the circumstances, I fully agree with the view of the AO that the claim of bad debt made by the appellant is not genuine claim and hence all the grounds of appeal filed by the appellant on this issue are rejected. 4.2 The Ld.AR submitted before us that the assessee had explained before the Ld.AO vide letter dated 01.03.2013 that the amount written off were outstanding in the books of the assessee for more than 3 years pertaining to either non receipt of brokerage towards purchase and sale of shares which was treated as income earlier or due to loss incurred on purchases/sale of shares on behalf of clients. The Ld A.R further submitted that in all there were 921 clients whose accounts are written off during the relevant assessment year in the case of the assessee. The Ld.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee during the course of its business and the assessee would be entitled to claim deduction on account of the same. In the case of the assessee the Ld.AR had explained before the Ld.AO that the loss was either due to failure on the part of the clients of the assessee to make payment for the purchase of shares on behalf them by the assessee or due to failure on their part to deliver the shares traded by the assessee on behalf of the clients and further nonpayment of the brokerage charges which was booked as income by the assessee on mercantile basis. The Ld.AR had further clarified before the Ld.AO that while claiming such loss, due adjustment with respect to sale of shares had been taken into account and only the actual loss is claimed as deduction. Considering the above facts, it is evident that the decision of the Hon ble Bombay High Court in the case of CIT vs. Shreyas S Morakhia (supra) will be applicable in the case of the assessee and the loss incurred by the assessee on the above transaction has to be allowed as deduction. In the case of the assessee the grouse of the Ld.AO is that the assessee has not provided the details of such debtors. We fail to understand as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
