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2016 (1) TMI 743 - ITAT LUCKNOWAssessment of interest income - business income or income from other sources - Held that:- The assessee has not brought any material to show that interest income is taxable under any other head except income from other sources and therefore, we are of the considered opinion that the order of the Ld. CIT(A) is not sustainable because interest income is definitely taxable under the head income from other sources, until and unless, it is shown by the assessee that this interest income is taxable under some other head and since in the present case, the assessee has not so established, we hold that the interest income in the present case is correctly assessed by the AO under the head income from other sources. Hence, we reverse the order of the Ld. CIT(A) on this issue and restore that of the AO. - Decided in favour of revenue. Determination of value of property - Addition made on the basis of report of the registered valuer submitted for the value of capital work in progress regarding construction of Hotel China Gate - CIT(A) deleted the addition - Held that:- Addition is not made by the AO on estimate basis but this is on the basis of actual basis between investment declared by the assessee and valued by the registered valuer as per the valuers report submitted by the assessee itself. This addition was deleted by the CIT(A) on this basis that the addition was made by the AO subject to rectification as per outcome of DVO’s report. This is not the case of the Ld. CIT(A) that DVO has determined the value of the property at or near to the value of investment shown by the assessee. Hence, we are of the considered opinion that the order of the Ld. CIT(A) on this issue is also not sustainable. - Decided in favour of revenue. Disallowance of brokerage expenditure and staff welfare expenses - Held that:- Regarding disallowance of ₹ 10,000/- deleted by the Ld. CIT(A) out of staff welfare expenses, we are of the considered opinion that no interference is called for in the order of Ld. CIT(A) on this issue also because AO estimated ₹ 20,000/- as disallowable for the reason that the expenses is not fully verifiable and as against this, it was estimated by the Ld. CIT(A) that disallowance of ₹ 10,000/- out of staff welfare expenses is reasonable. We are of the considered opinion that in the facts of the present case, estimate by Ld. CIT(A) appears to be reasonable and hence, we decline to interfere in the same. Regarding disallowance of ₹ 1.00 lakh out of brokerage expenditure, we find that no cogent reasoning is given by the AO in the assessment order for making this disallowance and therefore, we feel that the entire disallowance out of brokerage expenses should have been deleted by the Ld. CIT(A) instead of deleting ₹ 50,000/- out of ₹ 1.00 lakh. We delete the entire disallowance of ₹ 1.00 lakh out of brokerage expenses. Accordingly, Ground No.3 of revenue is rejected whereas grounds raised by the assessee in the CO are allowed.
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