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2012 (12) TMI 285 - AT - Income TaxAddition on account of forfeiture of deposit as revenue receipt – Held that:- Compensation arises out of the agreement of letting out immovable property and therefore, assumes the nature of the income from house property. Therefore, in our opinion, such receipt would fall under the head ‘Income from house property’. - Any other receipt other than the annual value cannot be computed as income under this head - compensation received by the assessee cannot be taxed – addition deleted Disallowance of interest u/s. 36(1)(iii) of the I.T. Act – alleged that the assessee company has given loans to its sister concern by charging interest @4% and assessee is paying interest @8% on borrowed funds – Held that:- Loan advanced by the assessee at concessional rate to the sister concern is out of the redemption of units of mutual fund. When the assessee has not utilised the borrowed funds for advancing the same at concessional rate to the sister concern when the assessee’s own money out of the redemption of units of mutual fund has been given at concessional rate to sister concern, the same does not call for disallowance of proportionate interest u/s.36(1)(iii) of the I.T. Act - borrowed funds from Axis bank has gone towards purchase of the property and the amount advanced to the sister concern is out of redemption of Prudential ICICI liquid fund – addition deleted – In favor of assessee
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