Business Closed - Let out of Godowns - House Property or Business, Income Tax

[Rajendra Prasad]

ABC is a Small Private Limited Company.

After carrying manufacturing activity for 20 years business was discontinued in FY 2017-18.

The Factory was closed , Machinery was removed and part of the machinery was sold. There are no sales or operations in the year FY 2018-19. The company will not carry any business in future. But godowns were let out.

Company incurred the following amounts.

1. Gratuity Paid ₹ 50.00 Lacs

2. Salaries ₹ 5.00 Lacs

3 . Interest Paid to Bank on working capital limits : ₹ 20.00 Lacs (Still debtors are not realized and hence working capital limits could not be closed)

As there was no turnover can we claim these expenses as business loss.

Rent from godowns are to be treated as house property or business income.

Please clarify.