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2012 (10) TMI 559 - AT - Income TaxInterest Income and Dividend Income - taxable as PGBP or income from other sources - Held that:- As Dividend has been specifically defined as income from other sources in section 56(1)and no case has been made out that dividend in this case was incidental to any business activity, it has to be treated as Income from other Sources. The assessee had deposited the surplus funds from which interest income had been received. Therefore, interest income has been rightly assessed as income from other sources - against Assessee. Rental income - taxable as Business Income or not - Held that:- As the object of the assessee was to run the business centre by exploiting the property and not mere letting out the same on rent. It was accordingly held that the income had to be assessed as income from business. The order of CIT(A) is set aside and the claim of the assessee is allowed - in favour of assessee. Rates and Taxes - Held that:- the expenditure had been incurred in relation to land which was not used for the purpose of business the expenditure cannot be allowed while computing the income from business and not against Capital Gains - decided against the assessee. VRS Expenses - Held that:- As income from business centre has to assessed as business income and therefore, provisions of section 35DDA will be applicable in case of the assessee as per which any expenditure in connection with any VRS scheme has to be allowed in five equal instalments starting with the year in which the expenditure was incurred- decided in favour of the assessee. Expenditure of Rs.11,70,000/- on items such as insurance, telephone, security, travelling, motor vehicle etc and the expenditure on remuneration to the manager. already held that the income from the business centre has to be assessed as business income and therefore we hold that the expenditure will be allowed while computing the income from the business centre.in favour of the assessee. Depreciation - held that:- income from business centre has to be assessee as business income. Therefore, depreciation on all the plants and machinery installed in the business centre has to be allowed. We hold administrative expenses of Rs..34,11,991/- should be allowed as business expenditure. Sales Tax - addition of Rs.1,36,141/- being sales tax written back relating to sales in earlier years he AO had disallowed the claim on the ground that the business of the assessee had closed. CIT(A) has however allowed the claim on the ground that the AO had assessed income on account of sundry creditors relating to earlier year under section 41(1) and therefore the claim was allowable - Held that:- Order of CIT(A) allowing the claim is confirmed - decided against the department. Deduction under Section 54EC - Assessee has invested in NABARD Bond on the capital gains arising out sale transferable development rights of Rs..3,54,43,549/-, and this deduction is not in dispute. Hence, this ground has been rendered infructuous. Assessing Officer is directed that the loss shown under the head short term and long term capital gain is allowed to be carried forward - In the result, the appeal of the assessee is partly allowed and that of the revenue is treated as dismissed.
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