1999 (12) TMI 13

X X   X X   Extracts   X X   X X

Full Text of the Document

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 of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ghts 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 mana....