JUDGMENT

Dr. ARIJIT PASAYAT, J.—

1.Leave granted.

2.Challenge in this appeal filed by the revenue is to the correctness of the decision rendered by a Division Bench of the Gujarat High Court allowing the Special Civil Application filed by the appellant.

3.Background facts in a nutshell are as follows :

4.The respondent a Private Limited Company filed its return of income for Assessment year 2001-02 on 30th October, 2001 declaring total loss of Rs.2,70,85,105/-. The said return was processed under Section 143(1) of the Income Tax Act, 1961 (in short the Act) accepting the loss returned by the respondent. Notice under Section 148 of the Act was issued on the ground that claim of bad debts as expenditure was not acceptable. On 12th May, 2004 a return of income declaring the loss at the same figure, as declared in the original return, was filed by the respondent under protest. Copy of the reasons recorded was furnished by the appellant on the respondents request some time in November, 2004. The respondent raised various objections, both on jurisdiction and merits of the subject matter recorded in the reasons. On 4th February, 2005 the appellant disposed of the objections holding that the in