The Commissioner Of Income Tax-4,Mumbai v. M/S. Uti Securities Ltd

srk IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO. 1747 OF 2011 The Commissioner of Income Tax-4,Mumbai ...Appellant Versus M/s. UTI Securities Ltd. ...Respondent Ms.P.S.Cardozo for appellant.Mr.Percy J. Pardiwala, Sr.Advocate with Mr.Atul Jasani for respondent. CORAM: DR.D.Y. CHANDRACHUD & M.S.SANKLECHA, JJ. February 28, 2012. P.C. 1.Three questions of law have been raised by the Revenue in this Appeal under Section 260A of the Income Tax Act, 1961 as follows: (a)Whether on the facts and circumstances of the case and in law, the Assessee, who is a share broker, is entitled to deduction by way of bad debts under Section 36(1)(vii) read with Section 36(2) of the Income Tax Act, 1961 in respect of the amount which could not be recovered from its clients in respect of transactions effected by it on behalf of its client apart from the commission earned by it; (b)Whether on the facts and circumstances of the case and in law, the Tribunal was justified in allowing the claim of the assessee as bad debt overlooking the provision of section 36(2) which provides that unless such debt or part thereof have been included in the computation of income of previous year or earlier years it cannot be allowed as bad debt under Section 36(1)(vii); and (c)Whether on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the addition of Rs.14,80,000/- made under Section 14(a) of the Income Tax Act? 2. The Counsel appearing on behalf of the Revenue and the counsel appearing on behalf of the Assessee are agreed that the first two questions shall stand covered in favour of the assessee and against the Revenue by the judgment delivered today in Commissioner of Income Tax, Central-II, Mumbai Vs. Shri Shreyas S. Morakhia.[1]As regards the third question, the Tribunal has only directed the Assessing Officer to examine the issue in view of the judgment of this Court in the case of Godrej and Boyce Manufacturing Co. Ltd.[2] In that view of the matter, no substantial question of law would arise in the appeal. The appeal is accordingly dismissed. (DR.D.Y. CHANDRACHUD,J.) (M.S.SANKLECHA, J.) 1. Income Tax Appeal No.89 of 2011 decided on 28 February 2012 2. 234 CTR (Bom)-1 and 328 ITR 81