COMMISSIONER OF INCOME TAX Vs. EXCEL FASHION PVT LTD
LAWS(DLH)-2007-5-131
HIGH COURT OF DELHI
Decided on May 24,2007

COMMISSIONER OF INCOME TAX, DELHI-IV, C.R.BUILDING NEW DELHI Appellant
VERSUS
EXCEL FASHION PVT. LTD. Respondents

JUDGEMENT

V.B.GUPTA, J. - (1.) This appeal has been filed by the Revenue under Section 260 A of the Income Tax Act, 1961 (for short as 'Act') against the order dated 5th September, 2005 passed by Income Tax Appellate Tribunal (in short as 'Tribunal') in ITA No.1260/Del/2002 for the assessment year 1994-95.
(2.) Vide impugned order, the Tribunal allowed deduction of Rs.3,58,563/- under Section 36(1)(vii) of the Act on account of export incentives which became irrecoverable during the year under consideration. The Tribunal also allowed the liability of Rs.14,35,072/- payable to M/s. Old Village Industries Ltd. by inter alia holding that there was no good reason brought on record by the Assessing Officer to doubt genuineness of the liability.
(3.) Brief facts of the case are that Assessee in three assessment years i.e. 1989-90 to 1991-92 credited a sum of Rs.5,80,527/- in its Profit and Loss A/c on the basis of mercantile system of accounting. However, the Assessee received a sum of Rs.2,21,964/- only against such provision. The balance of Rs.3,58,563/- not received by him was considered as irrecoverable and the same stood written off for the year under consideration. The Assessing Officer disallowed the claim as the Assessee gave different explanation and no document was filed in support of the claim.;


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