2007 (7) TMI 241

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....ect in law in allowing depreciation of Rs. 1,21,26,481 to the assessee at the rate of 100 per cent. on tankers." 3. It is submitted by learned counsel for the Revenue that a similar question of law had arisen in the case of this assessee in I. T. A. No. 1052/2006 and the decision of this court was not in favour of the Revenue. It is submitted that the Revenue has preferred an SLP before the Supreme Court. Following the decision in I. T. A. No. 1052/2006, we are of the opinion that no substantial question of law arises for our consideration. 4. The second substantial question of law raised by the Revenue relates to the deletion of an addition of Rs. 4,24,43,689 made on account of bad debts. The assessee had given a bill discounting facilit....

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....Income-tax (Appeals) (the CIT(A)) and the Tribunal were of the view that the Assessing Officer had erred in not treating the amount as a bad debt, given the circumstances of the case as also the fact that the assessee had written off the amount as irrecoverable in its accounts for the relevant previous year in accordance with the provisions of section 36(1)(vii) of the Income-tax Act, 1961. 6. We do not find any error in the view taken by the Commissioner of Income-tax (Appeals) as well as by the Tribunal and are of the opinion that no substantial question of law arises for our consideration. There is no doubt that given the facts of the case, there was no hope left with the assessee of recovering the amount from Kedia and it is this whi....

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....e through this decision. The Supreme Court quoted a passage from an earlier decision rendered in CIT v. Shoorji Vallabhdas and Co. [1962] 46 ITR 144, 148, where it had been stated as follows : "Income-tax is a levy on income. No doubt, the Income-tax Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt ; but the sub-stance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a 'hypothetical income', which does not materialise." 10. The principle that the Supreme Court applied was that even if the accounts are maintained in the mercantile system, what has to be seen is whether ....