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2012 (11) TMI 632 - JHARKHAND HIGH COURTDiscontinuance of business - Taxable Income - ITAT restricted the nett profit at 12.5% of receipt of Arbitration Award when it held that income had to be computed in accordance with Section 176(3A) - held that:- Assessee has received a sum of Rs.1348095/- after discontinuance of business and in view of Section 176(3A) of the Act, this income is required to be added to the total income of assessee. The rate of 12.5% on this income is not the only taxable income but whole of receipt is the income to be taken into consideration and by indirect interpretation the receipt which is required to be taken into total income of the assessee under Section 176 (3A), can not be reduced to 12.5% as net taxable profit of the assessee which is contrary to the provision of Section 176(3A). Therefore, the question is answered that in the facts and circumstances of the case, the I.T.A.T. was not justified in restricting the net profit at 12.5% of receipt of money under Arbitration Award which was received after discontinuation of the business by the assessee and that income had to be computed in accordance with Section 176 (3A) of the Income Tax Act - appeal is allowed, accordingly.
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