COMMISSIONER OF INCOME TAX Vs. NUCHEM LIMITED

JUDGEMENT

(1.) This appeal has been preferred by the appellant-revenue under section 260A of the Income Tax Act, 1961 (in short, "the Act) against the order dated 27.3.2009, Annexure IV passed by the Income Tax Appellate Tribunal, Delhi Bench 'I' New Delhi (in short, "the Tribunal") in ITA No.2659/Del./2005 for the assessment year 1996-97, claiming following substantial question of law:-

(2.) A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The assessee company filed its return on 30.11.1996 declaring a loss of Rs. 30,31,03,210/- which was revised to Rs. 22,17,81,730/- vide revised return filed on 3.3.1998. The assessment under section 143(3) of the Act was completed on 30.3.1999 by making an addition of Rs. 1,15,15,905/- and loss of Rs. 89,80,454/- was allowed to be carried forward. The Assessing officer made a disallowance of Rs. 36,40,481/- on account of bad debts on the ground that the assessee had failed to give any plausible explanation vide order dated 30.3.1999, Annexure I. The assessee did not produce evidence of the debt becoming bad in the case of all the parties. On appeal by the assessee, the CIT(A) vide order dated 21.3.2005, Annexure II deleted the addition of Rs. 34,22,268/- and confirmed the addition of Rs. 2,18,213/- in respect of M/s Chemicals of India while observing that it was not a debt recoverable but was infact an advance made to the party for the purchase of material. The assessee filed appeal ITA No.2659/Del/205 before the Tribunal. The Tribunal reversed the order of the CIT(A) on this issue vide order dated 27.3.2009, Annexure IV. Hence the instant appeal by the revenue.

(3.) We have heard learned counsel for the parties.