Share brokers eligible to claim deduction of entire amount due to him from his client as bad debt

In a major relief to equity brokers, the conflicts arising on their “bad debt” claims have been put to rest by the Bombay High Court. Affirming to a ruling by Mumbai ITAT special bench In the case of DCIT vs. Shreyas S. Morakhia 40 SOT 432, the court on Tuesday said stock brokers were eligible to claim deduction of the entire amount due to them from clients as a bad debt, even though only the brokerages is offered as income. HC has followed Delhi High Court judgment in Commissioner of Income Tax Vs. Bonanza Portfolio Ltd. [2010] 320 ITR 178 in which it was held as follows:- “...