COMMISSIONER OF INCOME TAX Vs. PRODUCIN LTD.

JUDGEMENT

(1.) This appeal is filed by the revenue challenging the order dated 15-7-2004 passed in ITA No. 95/Bang./2001 by the Income Tax Appellate Tribunal at Bangalore.

(2.) The facts of the case are that the Respondent-Assessee, which is a Company maintaining its account on mercantile basis, filed its return of income for the assessment year 1997-98 on 1-12-1997, declaring a total income of Rs. 74,92,450. The said return was processed under Section 143(1)(a) of the Income Tax Act and thereafter was taken up for scrutiny assessment. At that stage it was found that the Assessee had made provision for doubtful debts to an extent of Rs. 5,51,120. The assessing officer held that since a provision was made, the same could not be considered under Section 36(1)(7) of the Income Tax Act. He also stated that there was no evidence produced like original minute books in support of the claim that the amount receivable from M/s. V.K. Patel and Co., was written off by the Assessee and that a similar claim was rejected for the earlier assessment year 1996-97 also. Therefore, the assessing officer rejected the claim with regard to bad debts under Section 36 by his order dated 24-12-1999. The said order was carried in appeal before the Commissioner (Appeals) but the Appellate Commissioner dismissed the appeal. Being aggrieved by the said order, the revenue filed the appeal before the Tribunal. The Tribunal confirmed the order passed by the Appellate Commissioner and hence, this appeal has been filed raising the following substantial question of law:

(3.) We have heard the learned Counsel for the Appellants and the learned Counsel for the Respondent-Assessee.