ANGEL CAPITAL AND DEBT MARKET LTD, MUMBAI v. ADDL CIT RG 4(1), MUMBAI

ITA 4693/MUM/2009 | 2006-2007
Pronouncement Date: 23-07-2010 | Result: Allowed

Appeal Details

RSA Number 469319914 RSA 2009
Assessee PAN AAACS6308J
Bench Mumbai
Appeal Number ITA 4693/MUM/2009
Duration Of Justice 11 month(s) 13 day(s)
Appellant ANGEL CAPITAL AND DEBT MARKET LTD, MUMBAI
Respondent ADDL CIT RG 4(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 23-07-2010
Date Of Final Hearing 21-07-2010
Next Hearing Date 21-07-2010
Assessment Year 2006-2007
Appeal Filed On 10-08-2009
Judgment Text
ITA NO.4693/MUM/2009 ASSESSMENT YEAR : 2006-07 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI G BENCH MUMBAI BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) AND SMT. ASHA VIJAY RAGHAVAN (JUDICIAL MEMBER) ITA NO. 4693/MUM./2009 ASSESSMENT YEAR : 2006-07 DATE OF HEARING : 21.7.2010 ANGEL CAPITAL AND DEBT MARKET LTD. ...... APPELLANT G-1 AKRUTI TRADE CENTRE ROAD NO.7 MIDC ANDHERI (E) MUMBAI 400 093 PAN AAACS6308J VS. ASSISTANT COMMISSIONER OF INCOME TAX .. RESPONDENT CIRCLE 4(1) AAYAKAR BHAVAN M.K. ROAD MUMBAI 400 020 APPELLANT BY : SHRI ADITYA MAHESHWARI RESPONDENT BY : SHRI SHRAVAN KUMAR O R D E R PER PRAMOD KUMAR: 1. THE SHORT ISSUE THAT WE ARE TO ADJUDICATE UPON IN T HIS APPEAL IS WHETHER OR NOT THE LD. CIT(A) WAS JUSTIFIED IN UPHO LDING THE IMPUGNED DISALLOWANCE OF RS.1 36 74 257/- ON ACCOUNT OF BAD DEBTS / BUSINESS LOSS. THE ASSESSMENT YEAR INVOLVED IS 2006-07 AND THE IMP UGNED ASSESSMENT WAS FRAMED U/S 143(3) OF THE INCOME TAX ACT 1961 ( FOR SHORT THE ACT ). ITA NO.4693/MUM/2009 ASSESSMENT YEAR : 2006-07 PAGE 2 OF 4 2. THE ASSESSEE BEFORE US IS A SHARE AND STOCK BROKER. THE ASSESSEE HAD CLAIMED BUSINESS LOSS OF RS.1 36 74 257/- ON ACCOUN T OF WRITE OFF OF DOUBTFUL DEBTS. THE ASSESSING OFFICER NOTED THAT ON A PERUSAL OF DETAILS IT IS CLEAR THAT ONLY AN AMOUNT OF RS.31 21 033/- IS ON A CCOUNT OF BROKERAGE WHICH ALONE SATISFIES THE REQUIREMENTS OF SECTION 3 6(2). THE BALANCE AMOUNT WAS DISALLOWED AND IN SUPPORT OF THE SAID DI SALLOWANCE RELIANCE WAS PLACED ON DECISIONS OF THIS TRIBUNAL IN THE CAS E OF INDIA INFOLINE SECURITIES LTD. VS ACIT 25 SOT 123 AND HARSHAD J. CHOKSI 52 ITD 511. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BE FORE THE CIT(A) BUT WITHOUT ANY SUCCESS. THE CIT(A) CONFIRMED THE STAND TAKEN BY THE ASSESSING OFFICER AND OBSERVED AS FOLLOWS:- 6.2 I AM IN COMPLETE AGREEMENT WITH THE FINDINGS O F THE A.O. THAT IN VIEW OF SPECIFIC PROVISION FOR DEDUCTION OF BAD DEBT U/S 36(1)(VII) R.W.S. 36(2) THE CLAIM OF BAD DEBT CANN OT BE ALLOWED AS BUSINESS LOSS AS HAS BEEN HELD IN THE CASE OF HA RSHAD J. CHOKSHI 52 ITD 511 BY THE MUMBAI ITAT. FURTHER T HE DEBTS OF THE APPELLANT ARE IN FACT DOUBTFUL DEBTS AND THE RE COVERY HAVE BEEN MADE IN THE SUBSEQUENT YEARS THEREFORE APPELL ANTS CLAIM OF BAD DEBTS AT BEST IS PREMATURE AND THE DISALLOWA NCE OF RS.1 36 74 257/- BY THE A.O. IS THEREFORE CONFIRM ED. GROUND NO.6 IS DISMISSED. 3. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APP EAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MA TERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 5. THE AFORESAID ISSUE IN THIS APPEAL HAS COME UP FOR CONSIDERATION OF THIS TRIBUNAL IN THE CASE OF DCIT VS SHREYAS S. MORAKHIA (ITA NO.3374/MUM./2004; A.Y. 1998-99). THE SPECIAL BENCH VIDE ORDER DATED 16 TH JULY 2010 WAS HELD THAT THE AMOUNT RECEIVABLE BY A SHARE BROKER FROM HIS CLIEN TS IN RESPECT OF TRANSACTIONS IN ITA NO.4693/MUM/2009 ASSESSMENT YEAR : 2006-07 PAGE 3 OF 4 SHARES IS A TRADING DEBT AND ACCORDINGLY ELIGIBL E FOR DEDUCTION AS SUCH. IT IS ALSO SETTLED IN LAW AS HELD BY THE HONBLE SUPREME COUR T IN THE CASE OF TRF LTD. VS CIT (1010-TIOL-15-SC) THAT THE BAD DEBTS ARE TO BE ALL OWED AS DEDUCTION IN THE YEAR IN WHICH THE BAD DEBTS ARE ACTUALLY WRITTEN. IN VIEW O F THESE BINDING JUDICIAL PRECEDENTS OBJECTIONS RAISED BY THE AUTHORITIES BE LOW ARE INDEED UNSUSTAINABLE IN LAW. 6. FOR THE REASONS SET OUT ABOVE AND RESPECTFULLY FOL LOWING HONBLE SUPREME COURTS JUDGMENT IN THE CASE OF TRF LTD. (SUPRA) A ND SPECIAL BENCH DECISION IN THE CASE OF SHREYAS M. MORAKHIA (SUPRA) WE DELETE THE IMPUGNED DISALLOWANCE. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 5. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. PRO NOUNCED IN THE OPEN COURT TODAY ON 23 RD DAY OF JULY 2010. SD/XX SD/XX (ASHA VIJAY RAGHAVAN) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 23 RD DAY OF JULY 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX MUMBAI 4. COMMISSIONER (APPEALS) MUMBAI 5. DEPARTMENTAL REPRESENTATIVE G BENCH ITAT MU MBAI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR PRADEEP J. CHWODHURY INCOME TAX APPELLATE TRIBUNAL SR. PRIVATE SECRETARY MUMBAI BENCHES M UMBAI ITA NO.4693/MUM/2009 ASSESSMENT YEAR : 2006-07 PAGE 4 OF 4 DATE INITIAL 1. DRAFT DICTATED ON 21.7.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 22.7.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 22.7.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 22.7.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 22.7.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 23.7.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 23.7.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER