Simple bash scripting question

I have created a simple bash script, ( name: takeback.sh )

It is in a directory that is part of my path ( I added this in .profile ).
echo $PATH shows this to be true.

The first line contains:
#!/bin/sh

I have the execute attribute set properly. ( chmod 777 takeback.sh )

In terminal, if I type in takeback.sh ( from any working directory ), the script executes as expected.

But if I simply type in takeback, I get "command not found".

Is this a terminal issue, or a scripting issue?

Your problem is that you told the system to run takeback, which does not exist. That is why you get the error. just change the name from takeback.sh to takeback. Then you can enter only takeback. The only reason for the .sh extension is to remain you of the type of file, just by looking at it.