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2010 (12) TMI 850 - AT - Income TaxDeduction u/s 80HHE - Disallowance - the recovery of salary, air fare incentive and service charges, reversal of provision of bad and doubtful debts and scrap sale - The sale of special import license - The phrase “profit derived from” has been defined in sub section 3 as the profit of business in the ratio of export turnover to total turnover - held that:- all these items of income have to be taken into account while computing the profit of business under the head “profit and gains of business or profession” while computing deduction under section 80HHG. - Decided in favor of assessee. Business income or income from other sources - Assessee received interest and rental income from three companies and treated as a business income - Merely because the properties had been let out with some facilities income cannot be assessed as business income - Interest income had arisen from fixed deposits, interests on loan to employees and interest on income-tax refund. Such items of income in our view has to be assessed as income from other sources - Accordingly interest income and the rental income has been treated as income from other sources Addition of expenses attributable to the earning of exempt dividend income under clause (f) of the Explanation 1 to section 115JB(2) - The dispute is regarding addition of the expenditure relatable to the exempt dividend income under clause (f) of Explanation 1 to section 115JB(2). The AO had attributed a sum of ₹ 13,35,850/- relating to the dividend income and therefore while computing the book profit he added the same under clause (f). We have already considered the issue of attribution of expenses relating to dividend income while dealing with the earlier ground and are held that only a sum of ₹ 25,000/- will be considered against dividend income. We therefore modify the order of CIT(A) and hold that a sum of ₹ 25,000/- shall be added under clause (f) while computing the book profit.
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