FIRST LEASING COMPANY OF INDIA LTD Vs. CIT

JUDGEMENT

(1.) The assessee has filed the present appeal against the order of the Income-tax Appellate Tribunal under section 260A of the Income-tax Act, 1961, for the assessment year 2006-07, raising the following questions of law:

(2.) The learned senior counsel appearing for the appellant-assessee contended that the order passed by the Tribunal is illegal, wrong and without justification. It is further submitted that the Tribunal failed to appreciate that the bad debt claim has been properly written off in the books of account on commercial consideration and it is not open to the tax authorities to ignore such crucial decision taken in the course of carrying on of the business. Further, it is contended that the Commissioner of Income-tax and the Tribunal failed to appreciate that the Assessing Officer in his order under section 143(3) of the Act has given several hearings and has gone through the facts thoroughly and, hence, there is nothing wrong or erroneous in the order passed by the Assessing Officer. Further, it was vehemently contended that the Tribunal erred in holding that the Assessing Officer is incorrect inasmuch as the claim of bad debt is justifiable in law as the same is written off as irrecoverable in the accounts of the appellant. Further, the counsel appearing for the appellant-assessee relied on the apex court judgment in the case of T. R. F. Limited v. CIT, 2010 323 ITR 397 to support his proposition that it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee.

(3.) The learned counsel appearing for the Revenue submitted that the Tribunal has correctly followed the principle enunciated in the judgment of this court, in the case of South India Surgical Co. Ltd. v. Asst. CIT, 2006 287 ITR 62. Therefore, the order passed by the Commissioner of Income-tax as well as the Appellate Tribunal are in accordance with law and the same has to be confirmed.