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TMI Blog2016 (12) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... ad 'Income from other sources'' even when there was sufficient material with him to verify the correctness of the claim of ''Income from house property'' and 'Business income'' while doing so, the ld authorities below had not appreciated the intention / prime object of the appellant.'' 2. That under the facts and circumstances of the case and in law, the authorities below have grossly erred in restricting the claim of deduction (Rs. 25,200) u/s 24(a) on the rental income considered as ''Income from other sources''. 3. That under the facts & circumstances of the case and in law, the authorities below have grossly erred in holding that the income of Rs. 96,000/- earned by the appellant from leasing of plant and machinery, according to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21800 sq.ft land out of which 19800 sq.ft was let out and remaining 2000 sq.ft remained vacant. The rental income of Rs. 9,34,887/- was received from letting out land and building. Further it also received Rs. 84,000/- as a rental income from letting out its plant and machinery. The assessee company in its original return, has shown the rental income from land and building under the head income from house property as per the provisions of the Section 22 of the I.T. Act and the income from letting out its plant and machinery was considered under the head business income. Thereafter in its revised return the expenses of Rs. 5,12,909/- related to letting out of land and building was disallowed at Rs. 4,01,920/- and consequently tax of Rs. 1,88 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade. The decision given in Ground No. 1 is against the appellant hence the same is decided against the appellant and the action of the AO in this regard is fair and reasonable. The same is sustained. The appellant fails on this ground.'' 2.2 During the course of hearing the ld. AR of the assessee has not made any oral submission except relying on the written submission filed before the Bench which has been taken into consideration for adjudication of the grounds of appeal of the assessee. 2.3 The ld. DR relied on the orders of the authorities below. 2.4 I have heard the rival contentions and perused the materials available on record. It is observed that the annual rental value was calculated by the AO on the basis of facts revealed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achinery and accordingly considered under the head income from house property and business income. But the rental income of Rs. 96,000/- from plant and machinery was assessed under the head other sources by the ld AO. As per the decision of High Court in the case of Shri Hanuman Sugar & Industrial vs. CIT (266 ITR 106), CIT vs. Northern India Iron &Steel Co. Ltd. (211 ITR 370), it was held that income from leasing out factory and building and machinery due to temporary suspension of business which is due to tied over financial crisis is a business income and not the income and not the income from other sources. This fact that this suspension of business is for temporary phase and we are at the verge of commencing activity was well informed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss since Sept. 1999 which has been explicitly admitted by the Director of the Company. It is also noted from the ld. CIT(A)'s order that the ld. AR of the assessee could not controvert the findings of the AO on this issue. When the Director of the assessee company had admitted that the assessee company had closed down its business due to losses and there was no business activity in the assessee company except rental income then it cannot be considered as business income of the assessee. Hence, in view of the above deliberations, I concur with the findings of the ld. CIT(A) which is sustained. Thus Ground No. 3 of the assessee is dismissed. 4.1 Apropos Ground No. 4 of the assessee, the facts and observations as narrated by the ld. CIT(A) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 4 of the assessee is dismissed. 5.1 Apropos Ground No. 5 of the assessee, the facts and observations as narrated by the ld. CIT(A) in his order is as under:- ''The assessee company earned misc. income at Rs. 13,855/- which was shown under the head business income in its original as well as revised return. Thereafter during the assessment proceedings, the AO assessed the misc. income under the head income from other sources. During the course of appeal hearing, the A.R. for the appellant submitted that as per Companies Act, companies are required to prepare its financial as per the Schedule VI. As per its requirement the income which are incidental and ancillary to business are shown as misc. income under direct income whereas as per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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