- (1.) THE present appeal, filed under s. 260A of the IT Act, 1961 (hereinafter referred to as "the Act"), arises out of the order "1. Whether on the facts and in the circumstances of the case and on the basis of material available on the records, the Tribunal was legally correct in confirming the order of the CIT(A) deleting the addition of Rs. 6,27,735 on account of disallowance of the assessee's claim of bad debts made by the AO ? 2. Whether on the facts and in the circumstances of the case and the material available on the records, the Tribunal was legally justified in confirming the findings of the CIT(A) that the conditions of the provisions of s. 36(1)(vii) of the IT Act, 1961 were met in the assessee's case -
(2.) BRIEFLY stated the facts giving rise to the present appeal are as follows : total loss of Rs. 8,24,734. It had claimed bad debt of Rs. 6,27,735 on the ground that major shareholding of the respondent -assessee was with M/s Roto Pumps and Hydraulic Ltd. and most of the activities by the assessee -company were for the said shareholder. The assessee had taken plant and machinery on lease from the said shareholder company. A sum of Rs. 6,27,735 was lying under the head "Sundry debtors" which the company was not able to realise as this money was due and payable by M/s N.B. Enterprises. The assessee had sent several letters directing the debtor to pay the amount but the debtor did not even acknowledge the same. The AO disallowed the claim on the ground that the debts have become bad and further the conditions for allowances of the bad debt as provided under s. 36(2)(i) have not been clearly brought out. However, the CIT(A) has allowed the claim on the ground that the AO has not pointed out that this debt has not been taken into account in computing the income in any earlier or previous year, which order has been upheld by the Tribunal.
(3.) WE have heard Sri R.K. Upadhyay learned counsel for the Revenue and Sri S. K. Garg learned counsel for the respondent -assessee. Sri Upadhyay learned standing counsel submitted that the CIT(A) has wrongly put the onus upon the authority to say that the amount in question have not been claimed as deduction in computing the income in any of the previous year and therefore the order of the Tribunal upholding the deletion is not justified.;