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2010 (12) TMI 894 - AT - Income TaxReopening - Revenue or capital expenditure - Validity of notice - It is not in dispute that in the case of the Assessee all investment is stock in trade which is accepting by the department since long - The interest earned in the case of the Bank, on all share and security assets are stock in trade and whatever the loss/profit are not in the nature of capital - The entire interest income of securities under whatever category had been and is being assessed in all these years as business income - Since the claim of the assessee is as per RBI guidelines and CBDT has also issued directions to allow premium to be amortized remaining with the maturity, therefore, the Assessing Officer is directed to allow the claim of the assessee amounting to Rs.65,51,826 - Decided in favor of the assessee Regarding deduction u/s. 36(1)(viia) - Held that: The bare reading of section 36(1)(viia) mades it clear that the advance made by the rural branches are exempt under this section, irrespective of the facts that these are made to persons(s) involved in the rural activities or otherwise - this has been the Assessing Officer has misconceived the provisions that only advances which were for rural purposes has to be considered for the purpose of computing deduction u/s. 36(1)(viia) - Decided in favor of the assessee
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