Bad debt allowance for stock broking/investment consultant entities

Facts :

Assessee a stock broker/investment consultant had written off some amounts of a customer due to non-receipt of dues who was also into trading of futures. AO and CIT(A) disallowed the same citing that the same was not income in the first place. On higher appeal -

Held in favour of the assessee that the entire amount was a bad debt and allowable as a business loss under Section 37.

Applied :

CIT v. Bonanza Portfolio Ltd. 2010 TaxPub(DT) 0750 (Del-HC)

Ed. Note : Brokerage income is the topline for such entities. The loss of the entire underlying is a trading loss, thus allowable as a business loss under Section 37.

Case : Almonds Global Securities Ltd. v. ACIT 2023 TaxPub(DT) 2467 (Del-Trib)