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2014 (7) TMI 867 - AT - Income TaxGenuineness of sales consideration of land sold – Price lesser than circle rate as per section 50C – Held that:- The assessee has specifically objected to the adoption of stamp duty valuation rate - mere fact that the assessee has not challenged the stamp duty valuation cannot be put against the assessee – Relying upon CIT v. Chandra Narain Chaudhuri [2013 (9) TMI 646 - ALLAHABAD HIGH COURT] - once the assessee claims that the actual market value of the land or building is less than stamp duty valuation adopted by the authorities, it is incumbent upon the AO to refer the valuation of land or building to the departmental valuation officer - the AO has not done so - matter is remitted back to the AO for fresh adjudication – Decided in favour of Assessee. Rebate of interest paid on security FDR - Whether or not income paid on interest against the fixed deposits can be said to have been incurred "wholly and exclusively" for the purpose of earning interest income from fixed deposits - Held that:- In order to protect the interest earnings from fixed deposits and to meet her financial needs, when an assessee raises a loan against the fixed deposits, so as to keep the source of earning intact, the expenditure so incurred in wholly and exclusively to earn the fixed deposit interest income - assessee could have gone for premature encashment of bank deposits, and thus ended the source of income itself, as well, but instead of doing so, she resorted to borrowings against the fixed deposit and thus preserved the source of earning - expenditure incurred is an expenditure incurred wholly and exclusively for earning from interest on fixed deposits - in the case of a business assessee, and in a situation in which the borrowings against fixed deposits were resorted to for use in business, consideration for end use of funds so borrowed would be relevant because the interest deduction is claimed as a business deduction u/s 36(1)(iii) - the interest on borrowings against the fixed deposits could be said to protect the interest income from fixed deposit interest and incurred wholly and exclusively for the purposes of earning income –Decided in favour of Assessee.
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