2013 (5) TMI 492

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....ta, J. (Oral) The present appeal under Section 260A of the Income Tax Act, 1961 (for short 'the Act') arises out of an order dated 26.03.2012 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A' Chandigarh (for short 'the Tribunal') in relation to assessment year 2004-05 whereby the penalty imposed consequent to addition of Rs.45,14,373/- and Rs.11,45,476/- was set aside by the Tri....

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....st is to be disallowed under section 36(1)(iii) of the Act. Such borrowings to that extent cannot possibly be held for the purpose of business but for supplementing the cash diverted without deriving any benefit out of it. Accordingly, the assessee will not be entitled to claim deduction of the interest on the borrowings to the extent those are diverted to sister concerns or other persons without ....

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....me, which may attract penalty. In respect of addition of Rs.11,45,476/-, the assessee claimed it as bad debts expenses in the profit and loss account filed with the return of income. But vide letter dated 24.10.2006, the assessee communicated to the Assessing Officer that actually this amount was written off in the books of account and the same be added to the returned income at the time of fin....