TMI Blog2011 (12) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... directions of the SEBI, the share broker had deducted DP charges from the assessee in respect of the transactions carried out by the assessee-customer. The ld. Counsel submitted that the principal broker had debited the account of the assessee. The assessee was under the impression that the principal broker would give the details of the customers and DP charges from whom the amount was to be recovered. However, during the financial year 2005-06, the principal broker informed the assessee that it was not possible for them to give customer wise details of DP charges since the depositors, viz. NSDL/CDSL had not given the breakup to the principal broker. Accordingly, the ld. Counsel submitted that the DP charges are expenditure for carrying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evious years, can be allowed as a bad debt provided the same was written off as bad debt. In the case under consideration, the ld. Counsel for the assessee stated that the assessee did not know the details of the customers and the DP charges. Therefore, the assessee could not give any particulars whether the DP charges debited in the account of the assessee was included in any one of the previous year as income. Unless and until the assessee knows the details with regard to the customers or the details of the DP charges are included in the taxable income, the same cannot be allowed as bad debt. 4. Rival contentions were considered in the light of the material available on record. The assessee claimed an expenditure of `1,16,521/-. as pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having been assessed in respect of the share brokerage income, the said debt or part thereof has been taken into account in computing the total income as required u/s. 36(2)(i) of the Act. The Special Bench after considering the judgment of th Apxt Court in the case of CIT vs. T.Veerabhadra Rao, K. Koteswara Rao Co. (1985) 155 ITR 152 found that the brokerage has already been taxed as income in the hands of the assessee under the head business income and hence the condition prescribed u/s. 36(2)(i) has been satisfied. The assessee has already returned the debt repaying the amount received from the respective clients against purchase of shares. Therefore, it has to be allowed as bad debt while computing the total income. In the case befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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