bad debts ***************share brokers

[CA.BHUPENDRASHAH]

Madhur Shares & Stock Pvt. Ltd. v. ACIT [ITA Nos. 615/Ahd/2005 and 704/Ahd/2005] [2010] 5 taxmann.com 119 (AHD. - ITAT)
Once commission/brokerage is credited in P&L account of assessee broker and entire debit balance including principal and brokerage is found irrecoverable and is written off in books by assessee, same can be allowed as bad debt allowable u/s 36(1)(vii) - Where total debt debited in the account of the client is inclusive of brokerage then brokerage being part of the total debt having been taken into account in computing the income, would satisfy the provisions of sec. 36(2) and therefore, when assessee writes off such debt then he would be entitled for deduction u/s. 36(1)(vii)......

[CA.BHUPENDRASHAH]

http://What%20about%20Special%20bench%20matter%20pending%20@%20mumbai%20?%20[Morakhiya%20group%20cases]???

[ashutosh majumdar]

Well, Delhi High Court already decided the issue in DB (India) Securities Ltd (2010) 187 Taxman 161 (Del). So ITAT is justified in not waiting for the Special Bench.

But I agree with you that there is no justification in such gross delay in setting up the Special benches. So may important issues are pending and by the time SB is formed, some court has taken a view rendering reference to SB waste.

Hope Hon'ble new President will make fast benches to decide SB matters.

[CA.BHUPENDRASHAH]

Broker's Bad Debts Allowable U/s 36(1)(vii): Shreyas S. Morakhia ITAT Special Bench

[CA.BHUPENDRASHAH]

ok