9911796707
TMI Blog1999 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ?" We have heard the learned advocates for the parties and the assessee and their rival contentions. Mr. J. P. Khaitan, the learned advocate appearing for the assessee, submitted that in the light of the legal provisions contained under section 36(1)(vii) of the Income-tax Act, 1961, the amount of any bad debt or part thereof which is written off as irrecoverable in the accounts of the assessee has to be deducted. The amount in question is Rs. 32,57,894 relating to the assessment year 1985-86. The assessee's case before the Tribunal was that the assessee had supplied certain materials to Tata Mills Limited which was taken over by the Central Government because of promulgation of an Ordinance called the Textile Undertakings (Taking Over o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ights and leaseholds, etc., along with the privileges that went with such take over. Section 7 of the Ordinance, however, clearly provided the total exclusion of any liability having been incurred by a textile company in relation to the textile undertakings before the appointed date. Section 7 of the Ordinance reads as follows : "For the removal of doubts, it is hereby declared that any liability incurred by a textile company in relation to the textile undertakings before the appointed date shall be enforceable against the concerned textile company and not against the Central Government or the custodian." When we appreciate the preamble to the Ordinance, in the light of section 3 thereof which relates to the act of taking over of the man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinance. Neither is there any prohibition about filing of any suit against the company, whose management has been taken over under the Ordinance nor has any liability, by operation of law ceased to exist. Viewed thus we have no doubt whatsoever that the assessee could have proceeded against the Tata Mills for recovering the amounts due to it and if the amounts, despite such proceedings, could not have been recovered, it had the option to apply to the Assessing Officer in terms of section 36(1)(vii) of the Income-tax Act, 1961, for such relief as could be found due to it. When we look to the judgment of the Tribunal we found that the Tribunal has itself permitted the assessee to take recourse to such action, leaving all such questions open. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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