TMI Blog2012 (4) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed rates. ii. The learned CIT(A) erred in confirming the disallowance of claim of business loss of ₹ 27,71,456 being the amount of debt becoming irrecoverable and written off by the Appellant. 3. The facts are that assessee is a member of BSE and during the year has carried out share broking activities. The assessee has claimed a sum of ₹ 28,75,000/- towards depreciation on the membership right of Bombay Stock Exchange, calculated @25% on the value of 1,15,00,000/- 3. On finding that the assessee has claimed depreciation on the BSE membership card, the AO asked the assessee as to how the said claim was allowable. The assessee, in response to the query raised by the AO, replied that though the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court in the case of Techno Shares Stock (P) Ltd., we find that the issue now is squarely covered by the decision of Hon ble Supreme Court, therefore, respectfully following the decision, we allow the ground taken by the assessee and allow depreciation on the BSE Membership Card. 8. The second ground is disallowance of loss ₹ 27.71 lacs being the amount of debt becoming irrecoverable and written off by the appellant. 9. The facts relating to this ground is as under:- The assessee had claimed the amount written off was towards brokerage dispute, however, no evidence in this regard has been furnished. The amounts outstanding as appearing in the account of client would consist of amounts receivable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iii) Meena J. Shah 25.000.00 ------------------ Total 27,71,456.26 ------------------ i) The Sovereign Nariman Broking Pvt. Ltd. Were their subbrokers. A sum of ₹ 37.93 was recoverable from them in May 2003. The company was given repeated reminders about payments. However the company was unable to pay its dues due to non receipt of money from its clients. The outstanding in August 2003 were ₹ 26.93 Lakh. The company finally raised its hands since they were u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uj.) Dhann Enterprises Engineers (P.) Ltd. The amount of ₹ 27,07,129/- relates to transaction of purchase and sale of shares made by M/s Sovereign Nariman Finvest P. Ltd. as subbroker of the assessee for their clients and the loss if at all is suffered by M/s Sovereign Nariman Finvest P. Ltd. and not by the assessee. The Sovereign Securities P. Ltd., the assessee company is extremely closely related to M/s Sovereign Nariman Finvest P. Ltd., the Director of Sovereign Securities P. Ltd. in which Mr. Harshad J. Choksi having 1173600 shares, i.e. 51.0039 % of total share holding. In Sovereign Nariman Broking P. Ltd., Mr. Harshad J. Choksi has 450 shares and the major share holding in Sovereign Nariman Broking Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writing off the same in the books of Sovereign Securities P. Ltd. and writing back the amount in the books of Sovereign Nariman Finvest P. Ltd. was only for avoidance of payment of tax. It is neither a case of business loss nor a case of bad debt, but it is a pure and simple tax avoidance measures adopted by the decision makers of both the companies which happen to be common. The addition of ₹ 27,07,129.71 is, therefore, correct. With regard to Office Reco regarding write of ₹ 39,326/-, no details have been filed while the addition is found to be correct. Regarding Meena J. Shah, no details of evidence have been furnished as the appellant has failed to give the evidence as to how and why the amount was not re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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