2012 (7) TMI 426

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....in nature and does not survive for adjudication. The lone surviving ground No.1 is reproduced herein below: "1. The learned Commissioner of Income-tax (Appeals) erred in law and on facts in confirming the penalty in respect of fixed deposit written off amounting to Rs.3,25,186/-." 3. The assessee is a firm engaged in the business of manufacturing of plastic rolls, sheets & caps cover etc., filed its return of income on 29-10-2003 along with statement of affairs of the firm and Statutory Auditor's report in Form No.3 CB and 3CD u/s 44AB of the Act. The case was selected for scrutiny and order was passed u/s 143(3) of the Act wherein one of the additions made was in respect of claim of bad debt of Rs.3,25,186/- which was debited in the prof....

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....ak of the said expenses is as follows: - "SCHEDULE-15 FINANCIAL EXP. : Bank charge 56,891.00 Interest to FI, Bank & other 4,62,143.00 Interest to partners 10,60,292.94 Fixed deposit w/off. 3,25,186.00   19,04,512.94" Out of the above 'Fixed deposit w/off' of Rs.3,25,186/- is the amount which was disallowed by the A. O. When questioned by the A. O., the appellant claimed that the amount was deductible u/s. 28 and u/s. 36(1) (iii). Appeal against the disallowance was filed, though not pressed before CIT(A). Thus the appellant made a blatantly wrong claim of 'expenses'. There was nothing apparent from the P & L A/c or computation of income that such a claim was being made. Only on account of the diligence of the A. O. the issu....