2008 (1) TMI 561 - HC - Income Tax

Reassessment- A sum of Rs.57,06,335 marked by the assessee as bad debt was disallowed. The Appellate Commissioner deleted the addition of the aforesaid amount being the provision for bad and doubtful debts while computing the book profit under section 115JB of the Act. Further appeal was preferred by the Revenue against the said appellate order to the Income-tax Appellate Tribunal which also proceeded to dismiss the appeal of the Revenue. Hence, this further appeal under section 260A of the Act. Held that- dismissing the appeal, that the order of the Tribunal was to be upheld since no substantial question of law arose for consideration.

Summary

Issues:
1. Appeal under section 260A of the Income-tax Act, 1961 against the order of the Income-tax Appellate Tribunal.
2. Disallowance of a sum marked as bad debt by the assessee while computing book profit under section 115JB of the Act.

Analysis:
1. The appeal under section 260A of the Income-tax Act, 1961 was filed by the Revenue against the order of the Income-tax Appellate Tribunal pertaining to the assessment year 2001-02. The respondent-assessee had initially filed a return of income showing Rs.4,60,96,960 and was assessed under section 115JB of the Act. The Assessing Officer reopened the assessment under section 147 of the Act as he believed that certain income had escaped assessment. Subsequently, the assessment was completed under section 143(3) read with section 147 of the Act. The issue in contention was the disallowance of Rs.57,06,335 marked by the assessee as bad debt. The Appellate Commissioner had earlier deleted this addition while computing the book profit under section 115JB of the Act. The Revenue appealed against this decision to the Income-tax Appellate Tribunal, which also dismissed the appeal, leading to the current appeal before the High Court.

2. Upon hearing the arguments from both parties and examining the records, the High Court referred to a judgment of the Supreme Court in the case of Apollo Tyres v. CIT [2002] 255 ITR 273. The High Court found that the issue at hand was already addressed by the Supreme Court's decision, which had been followed by various High Courts, including the High Court in question. The High Court concluded that there was no substantial question of law requiring its decision, as the matter was settled by the Supreme Court's judgment. Therefore, the High Court dismissed the appeal, stating that there was no merit in challenging the decision based on the existing legal precedent.

This comprehensive analysis covers the issues raised in the legal judgment, detailing the background, arguments presented, and the court's decision based on relevant legal provisions and precedents.