/bin/sh: ./time.py: not found
That means that the shell don't find your program in the current directory, or that the python executable can't be found
If your file is there and python works then the "#!/usr/bin/python" must be wrong.
Since you have copied the file from a windows machine, the file will have DOS end of lines (0xd 0xa). Since in linux the eol is 0xA the 0xD character gets appended to the #! line and will cause the interpreter search fail.
You should first run the program through an utility like dos2unix or open it with a text editor able to save it with the right eol (PyGTKEditor for example)