M/s. National Stock Exchange of India Ltd., Mumbai V. JCIT Special Range 23, Mumbai

ITA 4853/MUM/2004

• Counselvise Citation: 485319914 RSA 2004
• Duration Of Justice: 6 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-03-2011
• Assessment Year: 1996-1997
• Appeal Filed On: 11-06-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARESH KUMAR BALODIA
• Assessee Lawyers: ARVIND V SONDE
• Keywords: Business income; Business expenditure; Search and seizure; Bad and doubtful debts
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 4853/MUM/2004 (ASSESSMENT YEAR: 1996-97) M/S. NATIONAL STOCK EXCHANGE OF JCIT, SPECIAL RANG E 23 INDIA LTD., EXCHANGE PLAZA, C-1, AAYAKAR BHAVAN BLOCK G, BANDRA KURLA COMPLEX VS. MUMBAI 400020 BANDRA (W), MUMBAI 400051 PAN - AAACN 1797 L APPELLANT RESPONDENT APPELLANT BY: SHRI ARVIND V. SONDE RESPONDENT BY: SHRI NARESH KUMAR BALODIA O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL WAS ORIGINALLY DISPOSED OFF BY THE COMM ON ORDER DATED 22.12.2008 PASSED FOR A.Y. 1995-96 TO 1997-98. CONS EQUENT TO THE FILING OF M.A. NO. 306/MUM/2009 VIDE ORDER DATED 31.08.2009 G ROUND NO. IIA RAISED BY THE ASSESSEE WAS RECALLED FOR THE LIMITED PURPOS E OF DECIDING THE ISSUES RELATED TO: (I) DISALLOWANCE OF PRIOR PERIOD EXPENS ES, AND (II) ADJUDICATION OF ALTERNATE CONTENTION REGARDING ALLOWABILITY OF SEBI CHARGES UNDER SECTION 43B AND ALLOWABILITY OF REVERSAL OF OTHER INCOMES A CCOUNTED FOR IN EARLIER YEAR AS BAD DEBTS/BUSINESS LOSS. 2. THIS MATTER WAS HEARD ON THE LIMITED ISSUE OF GROUN D NO. IIA AND THE LEARNED COUNSEL MADE HIS SUBMISSIONS AND THE LEARNE D D.R. COUNTERED THE ARGUMENTS. 3. WE HAVE CONSIDERED THE ISSUES. GROUND NO. IIA ON TH E ISSUE OF PRIOR PERIOD EXPENDITURE INVOLVE THE FOLLOWING ITEMS: - A) ELECTRICITY CHARGES ` 8,31,227/- B) POSTAGE & COURIER CHARGES ` 1,46,490/- C) PRINTING & STATIONERY EXPENSES ` 24,5000/- D) REPAIRS & MAINTENANCE EXPENSES ` 2,750/- ITA NO. 4853/MUM/2004 M/S. NATIONAL STOCK EXCHANGE OF INDIA LTD. 2 E) STAFF WELFARE EXPENSES ` 4,442/- F) TELEPHONE EXPENSES ` 33,442/- G) GRAVELLING EXPENSES (9,224+1,100) ` 10,324/- H) CONTRIBUTION TO INVESTOR AWARENESS ` 2,02,500/- FUND I) SEBI CHARGES ` 50,625/- J) REVERSAL OF INTEREST & OTHER INCOME ACCOUNTED IN EARLIER YEARS ` 28,64,737/- 4. OUT OF THIS THE LIMITED PURPOSE OF RECALL IS ONLY T O CONSIDER THE ELECTRICITY CHARGES OF ` 8,31,227/-, SEBI CHARGES OF ` 50,625/- AND REVERSAL OF INTEREST AND OTHER INCOME OF ` 28,64,737/-. THESE ISSUES ARE CONSIDERED AS UNDER: 4.1 ELECTRICITY CHARGES : THE CIT(A) HAS LISTED THE ACCOUNT HEAD-WISE DETAILS OF THE PRIOR PERIOD EXPENSES IN PARA 3.5 OF THE ORDER AND ELECTRICITY CHARGES FIGURED AT ITEM NO. 9. IT WAS STATED THAT T HE TOTAL PAYMENT OF ` 14,70,935/- INCLUDES ` 8,31,227/- FOR THE PERIOD 01.10.1994 TO 31.03.1995 RECEIVED IN APRIL 1996. IT WAS THE SUBMISSION THAT THE SAID BILL WAS WRONGLY STATED AS RECEIVED IN APRIL 1996 BUT ACTUALLY RECEI VED IN MARCH 1996. THEREFORE, THE PRIOR PERIOD ELECTRICITY CHARGES WER E RECORDED DURING THE YEAR AS PRIOR PERIOD EXPENSES. REFERRING TO PAGES 24 & 2 5 PERTAINING TO DEBIT NOTES RECEIVED, THE LEARNED COUNSEL POINTED OUT THA T THE BILLS WERE RECEIVED ON 27.03.1996 AND THE PERIOD PERTAINS TO 1 ST APRIL 1994 TO 31 ST DECEMBER 1995. THE ENTIRE BILL WAS ABOUT ` 14,70,935/-. OUT OF THIS THE BILL AMOUNT PRIOR TO APRIL 1995 WAS TO THE TUNE OF ` 8,31,227/- AND IT WAS TREATED AS PRIOR PERIOD EXPENDITURE WHEREAS THE BALANCE AMOUNT WAS TREATED AS CURRENT YEAR EXPENDITURE. THE A.O. DISALLOWED THE P RIOR PERIOD EXPENDITURE BUT ALLOWED THE CURRENT YEAR EXPENDITURE ARISING OU T OF THE SAME BILL. IT WAS HIS SUBMISSION THAT THE CIT(A) REJECTED THE SUBMISS ION THAT THE BILL WAS RECEIVED IN APRIL 1996 WHEREAS THE SAME WAS RECEIVE D ON 27 TH MARCH 1996, IN THE IMPUGNED ASSESSMENT YEAR. SINCE THE AMOUNT W AS DEMANDED AND CRYSTALLISED DURING THE YEAR THE SAME WAS ALLOWABLE EXPENDITURE. 4.1.1 THE LEARNED D.R., HOWEVER, SUBMITTED THAT THE PERIOD OF ELECTRICITY CHARGES PERTAINS TO EARLIER YEAR AND SO THE ASSESSE E SHOULD HAVE MADE A PROVISION AND THIS AMOUNT CANNOT BE ALLOWED AS EXPE NDITURE OF THIS YEAR. ITA NO. 4853/MUM/2004 M/S. NATIONAL STOCK EXCHANGE OF INDIA LTD. 3 4.1.2 WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM TH E FACE OF THE BILL ITSELF THE BILLS WERE RECEIVED IN MARCH 1996 AND THE DEBIT NOTE BY GE INVESTMENT COMPANY PVT. LTD. WAS DATED 26 TH FEBRUARY 1996. THE TOTAL AMOUNT WAS ` 14,70,935/- AS PER THE DEBIT NOTE OUT OF WHICH THE ABOVE AMOUNT OF ` 8,31,227/- PERTAINS TO USAGE CHARGES PRIOR TO APRI L 1995. THEREFORE, THESE ARE CATEGORIZED AS PRIOR PERIOD EXPENDITURE. EVENTH OUGH THEY ARE CATEGORISED AS PRIOR PERIOD EXPENDITURE THE BILL WAS RAISED DUR ING THE YEAR AND HAS CRYSTALLISED DURING THE YEAR. THEREFORE, WE ARE OF THE OPINION THAT THIS AMOUNT IS AN ALLOWABLE DEDUCTION FOR THE YEAR. ACCO RDINGLY THE A.O. IS DIRECTED TO ALLOW THE AMOUNT. AS SEEN FROM PARA 3.7 OF THE CIT(A)S ORDER THE CIT(A) WAS OF THE OPINION THAT THIS AMOUNT SHOULD H AVE BEEN ACCOUNTED FOR IN F.Y. 1996-97 RELEVANT TO A.Y. 1997-98 AS THE BIL L WAS RECEIVED IN APRIL 1996 AS NOTED BY HIM. SINCE THE BILL WAS RECEIVED I N MARCH 1996 ITSELF THE ASSESSEE HAS CORRECTLY ACCOUNTED FOR IN F.Y. 1995-9 6 RELEVANT FOR A.Y. 1996- 97. THEREFORE THE A.O. IS DIRECTED TO ALLOW THE SAM E. GROUND TO THAT EXTENT IS ALLOWED. 4.2 SEBI CHARGES OF ` `` ` 50,625/- : ASSESSEE CLAIMED AN AMOUNT OF ` 2,02,500/- TOWARDS INVESTORS AWARENESS FUND AND SEB I CHARGES OF ` 50.625/- UNDER THE HEAD PRIOR PERIOD EXPENDITURE. W HILE DISALLOWING THE FIRST AMOUNT THE CIT(A) HAS HELD THAT THE LIABILITY FOR THIS AMOUNT WAS CRYSTALLISED IN F.Y. 1995-96. THEREFORE, THE SAID D ISALLOWANCE WAS CONFIRMED. FOLLOWING THE SAME THE CIT(A) CONFIRMED THE DISALLO WANCE OF THE SEBI CHARGES OF ` 50,625/- AS WELL. IT WAS THE ALTERNATE CONTENTION B EFORE THE CIT(A) THAT THIS AMOUNT WAS ALLOWABLE UNDER SECTION 43B AS IT IS A STATUTORY PAYMENT MADE TO SEBI. 4.2.1 THE LEARNED COUNSEL SUBMITTED THAT SEBI CHARG ES ARE ALLOWABLE UNDER SECTION 43B IN THE YEAR OF PAYMENT AND ACCORDINGLY THE AMOUNT IS A ALLOWABLE EXPENDITURE DURING THE YEAR. 4.2.2 THE LEARNED D.R., HOWEVER, OBJECTED TO STATIN G THAT THIS IS NOT A LIABILITY OTHERWISE ALLOWABLE AND ACCORDINGLY SINCE THE PAYMENT TO SEBI IS NOT A STATUTORY PAYMENT THE SAME CANNOT BE ALLOWED. ITA NO. 4853/MUM/2004 M/S. NATIONAL STOCK EXCHANGE OF INDIA LTD. 4 4.2.2 WE HAVE CONSIDERED THE ISSUE. THE FEES PAID T O SEBI IS ALWAYS CONSIDERED AS AN AMOUNT DISALLOWABLE UNDER SECTION 43B BY THE REVENUE AND IT WAS ALREADY DECIDED IN MANY CASE THAT FEES PAID TO SEBI IS COVERED BY THE PROVISIONS OF SECTION 43B. CONSEQUENTLY EVEN THOUGH THE PAYMENT IS CRYSTALLISED IN A.Y. 1995-96, SINCE THE AMOUNT WAS PAID DURING THE YEAR THE SAME IS ALLOWABLE UNDER THE PROVISIONS OF SECTION 4 3B. ACCORDINGLY THE A.O. IS DIRECTED TO ALLOW THE AMOUNT. GROUND TO THAT EXT ENT IS ALLOWED. 5. THE NEXT ITEM IS WITH REFERENCE TO THE OTHER INCOME S REVERSED. THE DETAILS OF THE ITEMS WERE MENTIONED IN ROWS 28 TO 3 5 IN CIT(A)S ORDER AT PAGE NO. 5. THE DETAILS ARE AS UNDER: - 1 INTEREST INCOME OTHERS 8,695.79 REVERSAL OF PENAL INTEREST INCOME OF 1994-95 2 INTEREST INCOME OTHERS 1,00,273.80 REVERSAL OF VST INTEREST INCOME OF 1994-95 3 INTEREST INCOME OTHERS 13,505.58 REVERSAL OF LEASED LINE INTEREST INCOME OF 1994-95 4 INTEREST INCOME OTHERS 43,147.59 REVERSAL OF INCOME ACCOUNTED IN 1994-95 5 INTEREST INCOME OTHERS 93,945.24 REVERSAL OF INCOME ACCOUNTED IN 1994-95 6 INTEREST INCOME OTHERS 87,155.21 REVERSAL OF INCOME ACCOUNTED IN 1994-95 7 INTEREST INCOME OTHERS 2,04,657.72 REVERSAL OF INCOME ACCOUNTED IN 1994-95 8 INTEREST INCOME OTHERS 1,643.84 REVERSAL OF INCOME ACCOUNTED IN 1994-95 INTEREST INCOME OTHERS 5,53,024.78 9 OTHER INCOME 25,000.00 REVERSAL OF INCOME ACCOUNTED IN 1994-95 10 OTHER INCOME 20,000.00 REVERSAL OF INCOME ACCOUNTED IN 1994-95 11 OTHER INCOME 3,201.48 REVERSAL OF INCOME ACCOUNTED IN 1994-95 12 OTHER INCOME 4,11,993.95 REVERSAL OF INCOME ACCOUNTED IN 1994-95 13 OTHER INCOME 18,51,516.46 REVERSAL OF INCOME ACCOUNTED IN 1994-95 OTHER INCOME 23,11,717.46 ITA NO. 4853/MUM/2004 M/S. NATIONAL STOCK EXCHANGE OF INDIA LTD. 5 5.1 THE LEARNED COUNSEL SUBMITTED THAT THESE AMOUNT S WERE OFFERED AS INCOME IN EARLIER YEAR AND THESE WERE REVERSED DURI NG THE YEAR AS THERE IS NO SCOPE OF RECEIVING OR RECOVERING THE SAME. IT WAS H IS CONTENTION THAT ASSESSEE IS THE BEST JUDGE ON RECEIVING ITS INCOME AND RELIED ON THE PRINCIPLES LAID DOWN BY THE HON'BLE BOMBAY HIGH COU RT IN THE CASE OF LORDS DAIRY FARM LTD. VS. CIT 27 ITR 700 AND SUBMITTED TH AT THE INCOMES HAVING BEEN OFFERED IN EARLIER YEARS THE REVERSAL OF INCOM E IS ALLOWABLE EITHER AS BAD DEBT OR AS LOSS AS IT SATISFIES THE CONDITIONS PRES CRIBED FOR WRITE OFF OF THE AMOUNT. 5.2 THE LEARNED D.R. IN REPLY SUBMITTED THAT THIS I S REVERSAL OF ENTRIES MADE AND THIS ISSUE IS ALREADY CONSIDERED BY THE IT AT IN PARA 26 IN PAGE 13 AND ACCORDINGLY THERE IS NO MISTAKE TO BE RECTIFIED IN THIS ORDER. HE IN FACT QUESTIONED THE VERY MA ORDER PASSED IN THIS REGARD THAT ITAT SHOULD NOT HAVE REHEARD THE ISSUE ON THIS. 5.3 WE ARE AFRAID THAT WE CANNOT ACCEPT THE CONTENT IONS OF THE LEARNED D.R. ON THE ISSUE OF MA ORDER. THE ORDER OF THE MA WAS ALREADY ON RECORD AND AS PERTHAT, THIS THE GROUND WAS RECALLED FOR LI MITED PURPOSE OF DECIDING THE ISSUE WHICH WAS NOT CONSIDERED EARLIER BY OVERS IGHT. IF REVENUE IS AGGRIEVED IT IS OPEN TO PREFER AN APPEAL BEFORE THE HIGH COURT BUT THE LEARNED D.R. CANNOT RAISE OBJECTION WHEN THE ISSUE IS BEING CONSIDERED ON MERITS CONSEQUENT TO THE ORDER PASSED BY THE ITAT. WE ARE BOUND BY THE ORDER AND SO THE OBJECTION MADE BY THE LEARNED D.R. IS, THEREFORE, REJECTED. 5.4 IT WAS HIS CONTENTION THAT ASSESSEE SHOULD H AVE CORRECTLY ACCOUNTED THE INCOMES IN EARLIER YEARS AND NO EXPLANATION WAS GIVEN WHY THE AMOUNTS WERE REVERSED DURING THE YEAR. THE REASONS FOR REVE RSAL ARE NOT PLACED ON RECORD. THE CIT(A)S FINDINGS ON THE ABOVE AMOUNTS STATED IN SUB-PARA N(I) TO N(V) OF PARA 3.7 IS AS UNDER: - N)I. THE ITEMS AT SR. NOS. 28 TO 40 ARE ALL FOR RE VERSAL OF VARIOUS INCOMES ACCOUNTED FOR IN FY 1994-95. THESE ARE MERE ACCOUNTING ENTRIES FOR CORRECTING /REVERSING THE ACCOUNTING OF CERTAIN ITEMS AS INCOME IN THE EARLIER YEAR. THESE ENTRIES BASICALLY MEAN THAT THE INCOME ACCOUNTED FOR IN FY 1994-95 DID NOT EITHER E VENTUALLY ARISE OR AROSE AND WAS WAIVED BY THE APPELLANT OR APPLIED TO WARDS SOME OTHER OBLIGATION. SUCH REVERSAL OF INCOME ENTAILS I NITIATING THE PARTIES ITA NO. 4853/MUM/2004 M/S. NATIONAL STOCK EXCHANGE OF INDIA LTD. 6 CONCERNED THAT THE AMOUNTS PAYABLE BY THEM IN THE E ARLIER YEAR ARE WAIVED AND ARE NO MORE DUE FROM THEM. REVERSING AN INCOME ENTRY IN THE SUBSEQUENT YEAR DOES NOT MAKE THE ACCOUNTING EN TRY AN ACTUAL EXPENSE OF THE SUBSEQUENT YEAR. UNDER THE IT ACT EA CH AY IS A SEPARATE UNIT OF ASSESSMENT. INCOMES OR EXPENSES OF OTHER YEARS CANNOT THEREFORE BE CONSIDERED WHILE ASSESSING THE INCOME OF ANY PARTICULAR AY. THE CLAIM OF THE APPELLANT FOR DEDUC TION CAN ALSO NOT BE COVERED UNDER THE PROVISIONS OF S 28 AS HAS BEEN CO NTENDED VIDE LETTER DATED 17.3.2004. ONLY BUSINESS EXPENSES OR L OSSES WHICH ARE NOT EXPRESSLY COVERED BY ANY OTHER PROVISIONS OF TH E ACT CAN BE CONSIDERED FOR DEDUCTION U/S 28. IN THE INSTANT CAS E AS BROUGHT OUT ABOVE, THE REVERSAL OF INCOME ENTRIES IN ACCOUNTS C ANNOT BE CONSTRUED AS EXPENDITURE OR LOSS INCURRED. FOR THESE REASONS REVERSAL OF INCOME OF EARLIER YEARS CANNOT BE ALLOWED AS EXPENDITURE O F THE AY UNDER CONSIDERATION. N)II. IN THE ALTERNATIVE IT IS CONTENDED THAT REV ERSAL OF PENALTY ETC. INCOMES MAY BE CONSIDERED AS WRITING OFF OF BAD DEB TS. IT IS URGED THAT THE SAID AMOUNTS WERE ACCOUNTED FOR AS INCOME AND CREDITED TO PROFIT AND LOSS ACCOUNT AND OFFERED FOR TAXATION AS INCOME OF FINANCIAL YEAR 1994-95 RELEVANT TO ASSESSMENT YEAR 1995-96. T HE BOARD OF DIRECTORS IN FINANCIAL YEAR 1995-96 RELEVANT TO ASS ESSMENT YEAR 1996-97 DECIDED TO WAIVE THE FINES AND PENALTY CHAR GES ON BUSINESS CONSIDERATIONS. AS A RESULT, THE SAID AMOUNT BECAME IRRECOVERABLE FROM THE MEMBERS AND WAS WRITTEN OFF IN THE PROFIT AND LOSS ACCOUNT UNDER THE HEAD PRIOR PERIOD ADJUSTMENTS. THE SAID W RITE OFF MEETS ALL THE REQUISITE CONDITIONS FOR WRITE OFF OF BAD DEBTS CONTAINED IN SECTION 36(1)(VII) READ WITH SECTION 36(2) OF THE INCOME TA X ACT, 1961. THUS, (I) THE INCOME WRITTEN OFF HAS BEEN TAKEN INTO ACCOUNT IN COMPUTING THE INCOME OF THE APPELLANT COMPANY OF THE EARLIER PREV IOUS YEAR VIZ. ASSESSMENT YEAR 1995-96. (II) THE SAME HAS BEEN IRR ECOVERABLE OR BAD AS A RESULT OF THE DECISION TAKEN IN CURRENT FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 1996-97 AND (III) THE S AID AMOUNT HAS BEEN WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNTS O F THE APPELLANT (UNDER THE HEAD PRIOR PERIOD ADJUSTMENTS) FOR THE P REVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 1996-97. N)III. I AM UNABLE TO AGREE WITH THE ABOVE CONTENTI ON OF THE APPELLANT. THE DISTINCTIVE CHARACTERISTIC OF A DEBT CONTEMPLATED U/S 36(1)(VII) IS THAT IT BECOMES BAD WHEN ITS RECOVERY BECOMES IMPROBABLE. HOWEVER, EVEN AFTER A DEBT BECOMES BAD IT CONTINUES TO SUBSIST. THE OBLIGATION OF THE DEBTOR TO PAY THE CR EDITOR CONTINUES UNTIL THE DEBT IS DISCHARGED. THE SAID OBLIGATION OF THE DEBTOR TO PAY THE CREDITOR CONTINUES UNTIL THE DEBT IS DISCHARGED. TH E SAID OBLIGATION OF THE DEBTOR CONTINUES TO SUBSIST EVEN AFTER RECOVERY OF THE DEBT BECOMES BARRED BY LIMITATION. EVEN AGAINST A DEBT W HICH HAS BEEN WRITTEN OFF AS BAD, THE DEBTOR MAY, AFTER COMING IN TO RESOURCED IN FUTURE, CHOSE TO HONOUR HIS COMMITMENTS AND SETTLE EITHER WHOLE OR PART OF THE DEBT. ANY RECOVERY EFFECTED FROM A WRIT TEN OFF DEBT ALLOWED ITA NO. 4853/MUM/2004 M/S. NATIONAL STOCK EXCHANGE OF INDIA LTD. 7 AS DEDUCTION U/S 36(1)(VII) S DEEMED TO BE BUSINESS INCOME U/S 41(4) OF THE ACT. N)IV. ON THE OTHER HAND, IN THE INSTANT CASE THERE IS EXTINGUISHMENT OF LIABILITY BY THE CREDITOR I.E. THE APPELLANT. TH E PARTIES FROM WHOM PENALTIES ETC. WERE DUE TO THE APPELLANT HAVE BEEN DISCHARGED OF THEIR LIABILITY TO PAY. THE DEBT OWED BY THEM TO THE APPE LLANT DID NOT BECOME BAD IN THE SENSE THAT ITS RECOVERY BECAME DO UBTFUL OR IMPROBABLE. INSTEAD, THE DEBT WAS EXTINGUISHED BY T HE DECISION OF THE APPELLANT TO WAIVE THE PENALTY ETC. IN OTHER WORDS, THE APPELLANT GAVE UP ITS CLAIM TO RECEIVE PAYMENT OF THE AMOUNTS DUE TO IT. ON SUCH EXTINGUISHMENT, THE DEBT ITSELF CEASED TO EXIST. SU CH EXTINGUISHMENT IS AKIN TO APPLICATION OF INCOME AND IS NEITHER CON TEMPLATED NOR COVERED BY THE PROVISIONS OF S 36(1)(VII). FOR THES E REASONS THE ALTERNATIVE CONTENTION OF THE APPELLANT IS ALSO NOT ACCEPTABLE. N)V. IN VIEW OF THE ABOVE, THE DISALLOWANCE OF PRIO R PERIOD EXPENSES AGGREGATING TO RS.28,64,737 FIGURING AT SR . NOS. 28 TO 40 IS CONFIRMED. THE ASSESSEE DID NOT FURNISH ANY DETAILS WHY THE AM OUNTS WERE REVERSED. IF THE INCOME HAS ACCRUED IN EARLIER YEAR, THE REASON FOR WRITE OFF HAS TO BE EXPLAINED WHETHER IT IS WAIVER OF AMOUNT OR PROBLEM IN RECOVERY OR ANY OTHER REASON WHICH RESULTED IN DECISION TO WRITE OFF. IF THE AMOUNT WAS NOT ACCRUED IN EARLIER WHY THE SAME WAS TAKEN AS INCOME HAS TO BE EXPLAINED. MOREOVER, ASSESSEE SHOULD HAVE MADE SUCH CLAIM IN A.Y. 1995-9 6, WHEN ASSESSEES CASE WAS TAKEN UP FOR SCRUTINY ON THE REASON THAT S UCH INCOME HAS NOT ACCRUED IN THAT YEAR. SINCE THE AMOUNTS ARE ACCOUNT ED AS INCOME IN EARLIER YEAR PROVISIONS OF SEC. 36(2) ARE SATISFIED. WE ARE OF THE OPINION THAT THIS ISSUE REQUIRE RE-EXAMINATION BY THE AO TO UNDERSTAN D THE NATURE OF WRITE OFF AND TO CONSIDER WHETHER THE SAME CAN BE ALLOWED AS BAD DEBT OR LOSS AS THE CASE MAY BE IN THIS YEAR. FOR THIS, WE RESTORE THE ISSUE TO THE FILE OF AO TO CONSIDER IT AFRESH. 6. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH APRIL 2011. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 27 TH APRIL 2011 ITA NO. 4853/MUM/2004 M/S. NATIONAL STOCK EXCHANGE OF INDIA LTD. 8 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XIX, MUMBAI 4. THE CIT VII, MUMBAI CITY 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.