COMMISSIONER OF INCOME TAX Vs. KRONE COMMUNICATION LTD

JUDGEMENT

(1.) As these two appeals arise out of a common order passed against a common Assessee for the assessment years 1996-97 and 1998-99, they are taken up for consideration together and disposed of by this common order.

(2.) The facts leading to these appeals are as under:

(3.) The assessing authority by his order dated 25-1-2001 held that excise duty and sales tax should be added back when computing total turnover for allowing deduction under Section 80HHC of the Act. That 90 per cent of the gross agency commission should be taken to compute profits of business. The bad debts written off was disallowed as the Assessee had failed to prove that it was a trade debt, it had become bad and it was written off as irrecoverable in its accounts. Aggrieved by the said order, the Assessee preferred an appeal. The Appellate Authority upheld the contention of the Assessee who allowed the appeal and granted the relief sought for by setting aside the order of the assessing authority to that extent. Aggrieved by the said order, the revenue preferred an appeal to the Tribunal. The Tribunal by its order dated 17-8-2004 has affirmed the order of the Appellate Tribunal and dismissed the appeal. Aggrieved by the same, the revenue is before us. The Appeal was admitted to consider the following substantial questions of law: