TMI Blog2009 (1) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent. JUDGMENT The judgment of the court was delivered by J.S. KHEHAR. J. - The instant controversy relates to the assessment year1997-98 more particularly, the same is focussed on interest component of Rs.26,09,621 reflected by the respondent-assessee in his books of account. The respondent-assessee asserted that the aforesaid component of interest was not assessable towards tax on account of the fact that it had merely been reflected in the books of account to pressurize the loanees to make the payment. The Assessing Officer did not accept the plea advanced by the respondent-assessee and accordingly, included the interest component of Rs.26,09,621 to the returned income of the assessee. 2. Not satisfied with the determ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed/deciphered on the basis of the terms and conditions recorded therein, and that, a determination rendered during an earlier assessment in respect of a particular loan (which forms a part of a different contract/transaction) cannot be the basis of a finding, on an issue of deduction, in a subsequent assessment year unless it is the conceded position between the rival parties, that the interest arises out of the same transaction, or that, interest arises out of a contract the terms and conditions whereof are the same as the ones which are the subject of consideration at the present juncture. 6. The second contention advanced on behalf of the learned counsel for the appellant directly flows from Section 36 of the Income Tax Act, 1961 (h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts stipulated in the aforesaid provision. It is submitted that the assessee must satisfy the concerned authority that the deduction claimed is on account of a bad debt. The aforesaid bad debt should be irrecoverable. As a result of its being irrecoverable it should have been written off. And that, the said debt should have been written off in the previous year. 8. Although, clause (vii) refers to Sub-section 2 of Section 36, we find no justification to make any reference thereto as the issue in the present appeal can be determined on the basis of a plain reading of sub-clause (vii) of Section 36(1) of the Act itself. 9. When confronted with the first submission advanced by learned counsel for the appellant, it is the case of the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been reduced from the taxable income." 10. In spite of the aforesaid stance adopted on behalf of the respondent-assessee, the issue was not adjudicated on its merits by the Commissioner of Income Tax (Appeals). The matter came to be decided only on account of the fact that in a similar situation had been decided in an earlier assessment year, in a particular manner, and as such, the present case should also be decided in the same manner. 11. During he course of hearing, learned counsel for the respondent-assessee handed over to us in Court the order passed by the Commissioner of Income Tax (Appeals) dated 30.9.1997, the same is taken on record and marked as Annexure A. A perusal of Annexure A reveals that the matter which had co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht by the respondent-assessee on the disallowed deduction of interest of Rs.26,09,621/-) back to the Assessing Officer, requiring him to re-consider the same within the parameters of Section 36(1)(vii) of the Act. We hereby set-aside the orders dated 30.3.1999, 29.9.2000 and 15.7.2005 passed by the Assessing Officer, the Commissioner of Income Tax (Appeals), and the Income Tax Appellate Tribunal respectively only to the extent of their determination on the issue of deduction of Rs. 26,09,621/- claimed by the respondent-assessee under Section 36(1)(vii) of the Act. 12. Parties are accordingly directed to appear before the Assessing Officer on 2.2.2009. 13. In so far as the second contention advanced by the learned counsel for the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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