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2012 (11) TMI 621 - AT - Income TaxAddition of 10% of the unsecured loan as interest income. - assessee company advanced unsecured loan to another government company, viz. Trivandrum Rubber Works Ltd with an intention to take over the company. - Following the judgement of Tribunal in assessee’s own case for assessment year 2004-05 and for the reasons stated therein addition 10% of the unsecured loan as interest income on account of interest on advance to Trivandrum Rubber Works Ltd is not justified – Order of lower authorities are set aide and the addition is deleted – Decided in favor of assessee. Disallowance of claim of loss on revaluation of spares as expenditure - Held that:- The loss or gain, if any, in the revaluation would be notional in nature, therefore, the assessee may not have any funds for replacement of asset physically. Loss, if any, in the revaluation of the loose tools and implements would be capital in nature, therefore, the same cannot be allowed while computing the income as revenue expenditure- there is no infirmity in the order of the lower authority , the same is confirmed – Decided against the assessee. Income from Agriculture operations - producing rubber products - Whether Sale value of scrap can be excluded from the turnover while computing income under Rule 7A of the I.T. Rules, 1962 - Held that:- Order of the Tribunal is set aside and the issue is remitted back to the file of the assessing officer to verify whether the income from scrap is obtained in the course of agricultural operation, i.e. in the occurs of taking yield or whether it is natural scrap generated in producing rubber products covered by Rule 7A of the I.T. Rules and to assess the income from scrap accordingly - Assessing officer shall thereafter reframe the assessment order in accordance with law after giving reasonable opportunity of hearing to the assessee – appeal allowed for statistical purposes.
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