IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER &

SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 6311/MUM/2024 (Assessment Year : 2017-18 DCIT-13(3)(2) Vs. Remi Securities Limited

229, Aayakar Bhavan, Plot No. 11, M.K. Road, Cama Industrial Estate, Mumbai-400020. Walbhat Road, Goregaon (East), 400063.

PAN/GIR No. AAACR0401R (Appellant) .. (Respondent Assessee by Ms. Shloka Shah Revenue by Shri. R.R. Makwana, Addl. CIT Date of Hearing 28/01/2025 Date of Pronouncement 28/02/2025 / O R D E R आदेश PER AMIT SHUKLA (J.M):

The aforesaid appeal has been filed by the Revenue against order dated 07/10/2024 passed by Addl/JCIT(A)-5, Kolkata for the quantum of assessment passed u/s.143(3) for the A.Y.2017-18.

2. In the gorunds of appeal, the Revenue has raised following grounds:-

"1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in law and on facts by upholding the disallowance of the bed debts of Rs.2,82,32,482/- claimed by the appellant, despite the compliance with the conditions prescribed under section 36(1)(vii) of the Income Tax Act, 1961.

2. The CIT(A) failed to appreciate that the claim of bed debt due to non delivery of stock is premature and the assessee itself admitted receipts of sums from NSEL.”

3. At the outset, it has been submitted that this issue stands covered by the decision of the Tribunal in assessee’s own case for the A.Y.2014-15 wherein, on similar issue the Tribunal has deleted the said addition. Even the ld. CIT(A) has followed the Tribunal order. For the sake of ready reference, the relevant facts and finding of the Tribunal is reproduced hereunder:-

”2. Briefly stated, the assessee company which is engaged in the business of financing. trading and sub-broking of shares and securities, agro commodities and investment broking had e- filed its return of income for A.Y 2014-15 on 27.11.2014, declaring its total income at Rs. Nil (after claiming current year loss of Rs. 2,06,99,797/-). The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act.

3. During the course of the assessment proceedings it was observed by the A.O that the assessee company had inter alia claimed 'bad debts' of Rs. 1,98,70,000/-. On being queried, it was submitted by the assessee that it had carried out purchase and sale of commodities on the platform of National Spot Exchange Limited (for short 'NSEL) through M/s Motilal Oswal Commodities Broker Private Limited. It was the claim of the assessee that the aforesaid trading transactions carried out on the platform of NSEL were duly accounted for in its books of account. As such, it was submitted by the assessee that the profit arising from the aforesaid trading transactions were offered as its 'business income' in the profit and loss account. It was the claim of the assessee that a scam was unearthed in July, 2013, which revealed that NSEL had defaulted in its payment obligation to various investors and traders from August, 2013. As on 01.08.2013, the outstanding of NSEL towards the assessee amounted to Rs. 8,22,62,078/-. Out of the aforesaid outstanding amount the assessee had received an amount of Rs. 56,14,948/- during the F.Y. 2013-14 and a further amount of Rs. 1,56,406/- was received thereafter. As such, the balance outstanding of NSEL towards the assessee amounted to Rs. 7,64,90,724/-, It was submitted by the assessee that after considering all the facts of the case, the management of the assessee company had decided to 'write off 25% of the outstanding amount i.e. Rs. 1,98,70,000/- as bad debts' on 30.09.2013. Accordingly, after writing off the 'bad debts' of Rs. 1,98,70,000/- in its books of accounts, the outstanding balance of NSEL towards the assessee as on 31.03.2014 stood reflected as Rs. 5,67,77,130/-. It was the claim of the assessee that as it had duly shown the inc