ACTIVE FINSTOCK P. LTD, MUMBAI V. DCIT RG 4(1), MUMBAI

ITA 2280/MUM/2010

• Counselvise Citation: 228019914 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 22-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R C JAIN

Judgement Text

1 ITA NO. 2280/MUM/2010 2280/MUM/2010 2280/MUM/2010 2280/MUM/2010 (ASST YEAR 2006 (ASST YEAR 2006 (ASST YEAR 2006 (ASST YEAR 2006- -- -07) 07) 07) 07) IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI A AA A BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI R S SYAL, AM & R S SYAL, AM & R S SYAL, AM & R S SYAL, AM & SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM 2280/MUM/2010 2280/MUM/2010 2280/MUM/2010 2280/MUM/2010 (ASST YEAR 2006 (ASST YEAR 2006 (ASST YEAR 2006 (ASST YEAR 2006- -- -07) 07) 07) 07) ACTIVE FINSTOCK P LTD 1801 STOCK EXCHANGE TOWER DALAL STREET MUMBAI 400 001 VS THE DYCOMMR OF INCOME TAX RANGE 4(1), MUMBAI ( (( (APPELLANT APPELLANT APPELLANT APPELLANT) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO.AAACA8798G AAACA8798G AAACA8798G AAACA8798G A SSESSEE BY SHRI R C JAIN REVENUE BY SHRI K V SAMPATH KUMAR PER PER PER PER VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 7.1.2010 OF THE CIT(A)-8 MUMBAI RELATING TO AY 2006 -07. 2 THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS APPEAL IS AS UNDER: THE LD CIT(A) ERRED IN HOLDING THAT THE CLAIM OF B AD DEBTS OF RS. 6,41,981/- WAS NOT ALLOWABLE U/S 36(1)(VII) R.W .S 36(2) OF THE ACT SAVE AND EXCEPT TO THE EXTENT OF THE WRITE OFF OF THE BR OKERAGE. 3 WE HAVE HEARD THE LD AR OF THE ASSESSEE AS WELL A S THE LD DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE AS SESSEE IS A MEMBER OF THE BOMBAY STOCK EXCHANGE AND IN THE BUSINESS OF SHARE BROKING. THE ASSESSEE HAS CLAIMED BAD DEBT OF RS.6,41,981/-. THE ASSESSING OF FICER RAISED A QUERY ABOUT THE ALLOWABILITY OF THE CLAIM OF THE ASSESSEE IN VI EW OF THE CONDITIONS U/S 36(1)(VII) R,.W.S 36(2) OF THE I T ACT. THE ASSESSE E SUBMITTED BEFORE THE ASSESSING 2 ITA NO. 2280/MUM/2010 2280/MUM/2010 2280/MUM/2010 2280/MUM/2010 (ASST YEAR 2006 (ASST YEAR 2006 (ASST YEAR 2006 (ASST YEAR 2006- -- -07) 07) 07) 07) OFFICER THAT THE ASSESSEE HAS FULFILLED ALL THE CON DITIONS AS PROVIDED U/S 36(1)(VII) R.W.S 36(2) OF THE ACT. IT WAS FURTHER STATED THAT THE BROKERAGE INCOME WAS ALREADY OFFERED FOR TAXATION; THEREFORE, THE CLAIM MAY BE ALLOWED AS BUSINESS LOSS. THE ASSESSING OFFICER DID NOT ACCEPT THE CO NTENTION OF THE ASSESSEE AND THE CLAIM OF THE ASSESSEE WAS REJECTED AND ADDED TH E SAME IN THE TOTAL INCOME OF THE ASSESSEE. 3.1 ON APPEAL, THE CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER . 4 AT THE OUTSET, WE FIND THE ISSUE IS NOW COVERED B Y THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT V S SHRI SHREYAS S MORAKHIA REPORTED IN 40 SOT 432. RESPECTFULLY FOLLOWING THE DECISION OF THE SPECIA L BENCH OF THE TRIBUNAL CITED SUPRA, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED ON THE 27 TH , DAY OF MAY 2011. SD/- SD/- ( (( ( R S SYAL R S SYAL R S SYAL R S SYAL ) )) ) ACCOUNTANT MEMBER ( (( ( VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO ) )) ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 27 TH MAY 2011 RAJ* 3 ITA NO. 2280/MUM/2010 2280/MUM/2010 2280/MUM/2010 2280/MUM/2010 (ASST YEAR 2006 (ASST YEAR 2006 (ASST YEAR 2006 (ASST YEAR 2006- -- -07) 07) 07) 07) COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI