Judgment :- Radhakrishnan, J. This is an appeal preferred by the assessee under section 260A of the Income-tax Act against the order of Income-tax Appellate Tribunal in ITA. 622/Coch/92. Following are the questions of law raised for our consideration. 1. Whether or not the Tribunal was right in law in not allowing a deduction of Rs.1,06,978/- as bad under section 36(2) of Income-tax Act? 2. Whether or not the Tribunal misdirected itself and acted perversely taking into consideration that the goods did not belong to the assessee and that there is no amount due to the assessee particularly when the claim of the assessee was that the freight due has become bad and written off as evidenced by page 50 & 51 of the paper book? 3. Whether or not the Tribunal was right inholding that the three items of bad debt in aggregate Rs.44,527/- is not an allowable deduction as a bad debt without considering each item on its merits about recoverability like period of pendency difficulty for initiation of legal proceedings and other similar matters but only on a rule of thumb that amounts about Rs.3,000/- are not bad debt? 4. Whether or not the Tribunal was right in law in disallowing payment of interest on Rs.73,996/- when it is a liability incurred by the assessee and when there is no attornment when the vehicle was transferred to their sister concern and also when there is no material to show that the interest payment was for extra legal, personal or any non business consideration and voluntary in nature? Assessee is a partnership firm engaged in the business of transportation of goods. For the assessment year 1988-89, assessment under section 143(3) on a total income of Rs.74,05,000/- was made as against the total income of Rs.31,83,510/- returned by the assessee. Aggrieved by the various findings rendered by the assessing officer, assessee preferred an appeal before the Commissioner of Income-tax (Appeals). Appeal was partially allowed. Dissatisfied with the order of the Commissioner, assessee took up the matter in appeal before the Tribunal. A cross-objection was also filed by the Revenue. Assessee had claimed deduction of an amount of Rs.1,06,978/- as cost of goods damaged in transit. Disallowance was upheld by the Commissioner (Appeals) as well as by the Tribunal. Claim raised by the assessee as bad debt under section 36(2) was also decided against the assessee. 2. A cross-objection was also filed by the Revenue. Assessee had claimed deduction of an amount of Rs.1,06,978/- as cost of goods damaged in transit. Disallowance was upheld by the Commissioner (Appeals) as well as by the Tribunal. Claim raised by the assessee as bad debt under section 36(2) was also decided against the assessee. 2. Aggrieved by the same this appeal has been preferred. Assessee had claimed three items of deduction, Rs.1,06,978/- being the amount of freight which had become bad and irrecoverable as a result of the damage claimed by the customers, Rs.49,527/- being the aggregate of other bad debts and Rs.73,996/- being the interest payable to the financier on account of purchases of motor vehicles. Tribunal rejected the claims except bad debts to the extent of Rs.23,024/- made up of various debts each being below Rs.3000/-. According to the assessee, the reasoning for the disallowance are flimsy, perverse and contrary to the provisions of Income-tax Act, 1961. Assessee had claimed freight charges which had gone into the computation of the earlier years and had become irrecoverable because of the refusal by the customer to pay the freight due to the assessee on account of the pending claim for damages by the customer. Assessee has also stated that the Tribunal has committed an error in disallowing bad debts of three items. 3. Counsel appearing for the revenue contended that no question of law arises for consideration in this case and the question as to whether a debt had become bad or the point of time when it became bad are essentially questions of fact and therefore this appeal cannot be entertained. Reference was made to the decision of the apex court in Travancore Tea Estate Co. Ltd. V. C.I.T. (1998) 233 ITR 203. 4. We notice that all the authorities have concurrently found that the assessee’s claim for deduction of Rs.1,06,978/- cannot be allowed, especially, on the basis of audit report. Assessee while computing the income, had claimed deduction of the above mentioned amount as the amount payable to Kerala State Detergents & Chemicals Ltd., for the damage caused to their goods transported by the assessee. Before the assessing officer it was stated that Kerala State Detergents & Chemicals Ltd. had despatched 725 cartons of soaps to their Indore depot and that the cartons were damaged due to seepage of water. Before the assessing officer it was stated that Kerala State Detergents & Chemicals Ltd. had despatched 725 cartons of soaps to their Indore depot and that the cartons were damaged due to seepage of water. KSDC refused to take delivery of the damage goods. The assessee sold 172 cartons to M/s. P.V.S. Hospital. The remaining 578 cartons were taken by KSDC and they disposed of 200 cartons. The remaining 378 cartons were taken by the assessee in January 1986. In the audit report under section 142(2A), the auditors observed that it was not known as to how the quantity of 378 cartons were disposed of and why no value had been credited in the accounts. Further assessee had also claimed that deduction could be allowed as a bed debt under section 36 of the Income-tax Act. According to the assessee, on account of damages caused to the goods the assessee could not recover the sum of Rs.1,06,978/- from KSDC and in that sense there was a bad debt allowance under section 36(2). 5. The stand of the revenue is that the assessee was not entitled to claim the deduction either as a trading loss or as a bad debt for the assessment year 1988-89. Revenue placed considerable reliance on the report of the auditor. It was stated that the loss was incurred in the year 1983 and the matter was settled and the remaining goods were taken back in 1986. It was pointed out by the revenue that even if there was any liability that related to the earlier year. On the claim for bad debt, stand of the revenue, was that this was not an amount which had been taken into account in computing the assessee’s income for the current year or for any earlier year. Further it was pointed out that the assessee was only transporting the goods belonging to KSDC and there was no question of crediting the value of the goods in the assessee’s account. 6. We find no error in the reasoning of the authorities below. This is a case where the assessee’s accounts were subjected to audit under section 142(2A) of the Income-tax Act. 6. We find no error in the reasoning of the authorities below. This is a case where the assessee’s accounts were subjected to audit under section 142(2A) of the Income-tax Act. In the report, it has been specifically stated that the goods had been despatched by KSDC in the year 1983 and that if at all there was damage caused to the goods it was in the year 1983 and the matter was also settled later in January 1986. However, the assessee claimed deduction for the assessment year 1988-89 for a liability which had arisen in an earlier year. Further, it may also be noted that the goods never belonged to the assessee and the value of the goods was not credited in the assessee’s books. It cannot therefore be said that there was a bad debt. Further the amount was also not due from KSDC to the assessee, but claimed as payable by the assessee to them. Therefore it cannot be considered as bad debt due to the assessee within the meaning of section 36(2) of the Act. 7. It is true that the Tribunal has granted the assessee some relief. The Tribunal had gone through the list of the parties against whom the debts were written off. Tribunal had noticed that there are only three amounts totaling Rs.21,503/- and had felt that a direction be given to the assessing officer to allow the deduction for the bad debts below Rs.3000/- in each case. As regard the balance amount of Rs.21,503/- the Tribunal sustained the disallowance. We find no reason to take a different view. First of all the question as to whether a debt had become bad or the point of time when it became bad are essentially questions of fact and this court in this appeal is not justified in giving any direction to the assessing officer. Under such circumstance we answer all the questions in favour of the revenue and against the assessee. Consequently this appeal lacks merits and the same would stand dismissed.