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2012 (12) TMI 608 - HC - Income TaxExemption u/s 10(13A) - deduction from salary - payment of rent for residential accommodation - held that:- The ground on which the claim for exemption under Section 10(13A) was rejected by the assessing officer was that the salary receipts by the assessee from M/s Sahara India Mass Communication cannot be assessed under the head “salary”, but should be assessed under the head “income from other sources”. The assessing officer has however not brought any material to show that the relationship between the M/s Sahara India Mass Communication and the assessee was not that of a master and servant. - Deduction allowed - Decided in favor of assessee. Principle of netting or set off - Addition on account of interest paid by the assessee on loan taken for purchase of an exempted asset - held that:- The right to receive the interest and the liability to pay interest arose in respect of the same period and out of the same event i.e. non-payment of the sale proceeds in time. The delay in payment of the sale proceeds and the delay in repayment of the borrowing are both intertwined; one gives rise to interest income and the other gives rise to interest liability. We are of the view that this affords sufficient nexus between the two so as to justify the applicability of the principle of netting. Judgment of the Supreme Court in CIT vs. Dr.V.P.Gopinathan (2001 (2) TMI 10 - SUPREME COURT) is against the claim of the assessee but a closer look at the facts shows that the judgment of the Supreme Court in Keshavji Ravji & Co. vs. CIT (1990 (2) TMI 1 - SUPREME COURT) is closer to the assessee's case on principle. - The netting principle was adopted in CIT vs. Shri Ram Honda (2007 (1) TMI 86 - HIGH COURT, DELHI). Decided in favor of assessee.
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