TMI Blog2015 (4) TMI 1257X X X X Extracts X X X X X X X X Extracts X X X X ..... ebts in the account of M/s. Kiraj Consultants Pvt. Ltd. and in its books of account. Learned counsel has filed a copy of general ledger account and also the parties account of M/s. Kiraj Consultants Pvt. Ltd., wherein it has been clearly shown that amount of ₹ 2,61,09,809/- has been transferred to bad debts. Even in the P&L Account, in schedule 12 the bad debts written off [net of provisions] have been shown. Thus, this matter needs verification from the end of the AO to see, whether the bad debts has in fact been written off in accounts of the assessee or not - Appeal filed by the Assessee is partly allowed for statistical purposes. - ITA No. 2745/Mum/2011 - - - Dated:- 10-4-2015 - SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SHRI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed off the additional grounds of appeal raised before him. It is further submitted that considering the facts and circumstances of the case that the arbitration award relating to recovery of debts aggregating to ₹ 2,61,09,809/- was received during the previous year relevant to Assessment Year 2003-04, the loss of ₹ 2,61,09,809/- be allowed as deduction in the- Assessment Year 2003-04. 2. Brief facts of the case are that, the assessee company is engaged in the business of share broking. As against the returned loss of ₹ 11,22,400/-, the assessment was completed u/s 143(3) at an income of ₹ 57,81,590/-. Thereafter, the said order was set aside by the Chief CIT (OSD) u/s 263 on 10.03.2006, with the direction to v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bts, before taking any legal recourse. He further pointed out that the assessee by not collecting sufficient margin money and also by not closing out the transactions where dues cannot received from the client, was in fact infringement of the regulatory provision of SEBI. He further noted that as per the Arbitration Award dated 20.11.2002, the assessee was in possession of certain shares belonging to M/s. Kiraj Consultants Pvt. Ltd. which was procured by the assessee upon the orders of arbitration authority which resulted into deduction of liability by ₹ 2,40,70,297/- from ₹ 2,61,09,809/-. Thus, he was of the opinion that debt were recoverable and had not gone bad in this year. After referring to various decisions, he disallowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he recovery of the amount. Thus, assessee s claim of is bad debt should be allowed. 5. On the other hand, Ld. DR strongly relied upon the order of the Ld. CIT(A). 6. We have heard the rival submissions and also perused the relevant material placed on record. It is an undisputed fact that assessee had business relation with M/s. Kiraj Consultants Pvt. Ltd., as it was subbroker of the assessee. During the course of such business transaction there were huge debit balance in the account of the said party. One of the reasons given by the AO and Ld. CIT(A) that A prudent businessman will not allow such huge debit balance to continue till the year end. Such a reasoning cannot be sustained as the revenue cannot decide the business decisions a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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