The Commissioner Of Income Tax – 8, Mumbai v. M/S.prasam Trading & Finance Private Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2450 OF 2011 The Commissioner of Income Tax – 8, Mumbai..Appellant. Versus M/s.Prasam Trading & Finance Private Limited ..Respondent. Mr.Suresh Kumar for the appellant.Mr.Aditya Bhatt for the respondent. CORAM : J.P. Devadhar &M.S. Sanklecha, JJ. DATE : 13[th] March 2013 P.C. : 1.In this appeal by the Revenue for assessment year 2005-06, following questions of law have been proposed for our consideration. “a)Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in allowing the assessee, who is a share broker, deduction under Section 36(1)(vii) of the Income Tax Act, 1961 being the impugned loans / advances of Rs.1,96,00,000/- given by the assessee to its client (M/s.Roopshri Finvest Limited) in respect of share transactions effected by the assessee on behalf of the said client which the assessee claimed as irrecoverable / bad debt and hence deductible under Section 36(1)(vii) even though such deduction was clearly inadmissible as the impugned amounts are not debts as envisaged in Section 36(2) of the Act nor the assessee is in the business of banking or money lending wherein such loss is allowable under Section 36(2) of the Act ?law, the Tribunal was right in allowing the assessee, who is a share broker, deduction under Section 36(1)(vii) of the Income Tax Act, 1961 being the impugned loans / advances of Rs.1,96,00,000/- given by the assessee to its client (M/s.Roopshri Finvest Limited) in respect of share transactions effected by the assessee on behalf of the said client which the assessee claimed as irrecoverable / bad debt and hence deductible under Section 36(1)(vii) even though such deduction was clearly inadmissible as the impugned amounts are not debts as envisaged in Section 36(2) of the Act nor the assessee is in the business of banking or money lending wherein such loss is allowable under Section 36(2) of the Act ? b)Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in allowing the assessee, who is a share broker, deduction under Section 36(1)(vii) of the Income Tax Act, 1961 even though the assessee had never offered the impugned receipt of Rs.1,96,00,000/- for tax but had merely offered commission on the related share transaction for tax ?”law, the Tribunal was right in allowing the assessee, who is a share broker, deduction under Section 36(1)(vii) of the Income Tax Act, 1961 even though the assessee had never offered the impugned receipt of Rs.1,96,00,000/- for tax but had merely offered commission on the related share transaction for tax ?” 2.The Tribunal by the impugned order has restored the matter to the file of the assessing officer to decide the issue afresh after taking into consideration the decision of the Special Bench of the Tribunal in the matter of DCIT V/s. Shreyas S. Morakhia. This Court has upheld the decision of the Special Bench of the Tribunal by an order in the matter of Commissioner of Income Tax V/s. Shreyas S. Morakhia reported in (2012) 342 ITR 285 (Bom). Therefore, we see no reason to interfere with the impugned order remanding the issue to the assessing officer. 3.In these circumstances, we see no reason to entertain the proposed questions of law. Accordingly, the appeal is dismissed with no order as to costs. (M.S. Sanklecha, J.) (J.P. Devadhar, J.)