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TMI Blog2018 (9) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961 ["Act" in short] for the assessment year 2008-09 and confirmation of disallowance representing interest for want of TDS on the application of section 40(a)(ia) of the Act, the assessee also challenged confirmation of disallowance towards loss on account of mutilated notes claimed as expenditure under section 37(1) of the Act for both the assessment years. 2. It was the submissions of the ld. Counsel that the assessee is engaged in the business of trading in gold and filed its return declaring income of Rs..8,80,020/- for the assessment year 2008-09. The assessment under section 143(3) of the Act was completed on 30.12.2010 at an income of Rs..29,91,150/- and creating a demand of Rs..9,75,410/-. It was the submission of the ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of authorities below. In this case, the original assessment under section 143(3) of the Act was completed on 30.12.2010. Against the assessment under section 143(3) of the Act, the assessee preferred further appeal before the ld. CIT(A) and the ld. CIT(A) passed the appellate order dated 19.11.2012. Thereafter, by recording reasons, the Assessing Officer issued notice under section 148 of the Act to assessee to assess the sum of Rs..8,47,986.73, which was debited in the profit and loss account as mutilated notes loss. Since the mutilated notes can be exchanged and are replaceable from RBI/other banks, the Assessing Officer believed that income chargeable to tax escaped assessment. In this case, the income chargeable to tax was un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so on. It was the submission that, on appeal, the ld. CIT(A) confirmed the disallowance for both the assessment years under appeal since the facts and issue are identical. It was the submission of the ld. Counsel that the genuineness of the claim was not doubted by the Assessing Officer since the assessee has filed complete bank statement, where debit entries in the bank account were made. The ld. Counsel prayed for deleting the disallowance made by allowing the expenditure under section 37(1) of the Act. 5.2 On the other hand, the ld. DR strongly supported the orders of authorities below. 5.3 We have heard both sides, perused the materials available on record and gone through the orders of authorities below. In this case, the assessee cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CMD/CEO of all Scheduled Commercial Banks, while deciding to compensate the banks 25% of the loss incurred in respect of counterfeit notes of Rs..100 and above detected by them and reported to RBI and Police Authorities, it was also emphasised in the Extract of Monetary Policy Statement 2012-13 to streamline their system in a manner which will make them bear the risk of counterfeit bank notes rather than the common man who unknowingly comes in possession of such notes. Admittedly, the assessee is engaged in trading in gold bullion and there is every possibility of getting mixed the mutilated notes during the course of his business. In the assessment year 2008-09, the Assessing Officer allowed the loss to the extent of 20% of total claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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