COMMISSIONER OF INCOME TAX Vs. MODI TELECOMMUNICATION LTD.

JUDGEMENT

(1.) This appeal by the Revenue is directed against the order dated March 23, 2007, passed in I.T.A. No. 1463/Del/2003 in respect of the assessment year 1998-99.

(2.) The assessee had written off an amount of Rs. 81,28,269 during the year in question on account of bad debts. The assessee had sold certain pagers to individual customers on instalments. Later on the pager prices crashed and were available at a much lower price in the market. The customers did not make their further payments. It is on this account that the amount payable became outstanding and ultimately turned into bad debts. The assessee had tried legal means also but the said amounts could not be recovered. Consequently, the assessee wrote off the bad debts in its books of account and claimed a deduction in respect thereof.

(3.) The Assessing Officer, however, did not accept the contention of the assessee and made an addition of Rs. 81,28,269.