2018 (12) TMI 1494

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..... er the head “business income”. The income in question is directed to be assessed under the head “income from other sources”. Appeal of the assessee is allowed.
Sri J. Sudhakar Reddy, Accountant Member For the Assessee : Shri Manoj Kataruka, Advocate For the Revenue : Shri Saurav Kumar, Addl. CIT, Sr. D/R. ORDER PER J. SUDHAKAR REDDY, AM :- This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-4, Kolkata (hereinafter the 'Ld. CIT(A)'), passed u/s 250 of the Income Tax Act, 1961 (hereinafter the 'Act'), dt. 23/05/2018, relating to Assessment Year 2012-13. 2. The assessee is a company and filed its return of income on 05/12/2012, declaring total income of ₹ 2,82,520/-. The .....

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..... that the assessee factory was closed in the year 2010 and rental income started during the year 2010-11. 4. On careful consideration of the rival contentions, I am of the considered opinion that the income in question should be assessee under the head "income from other sources", for the following reasons:- a) The assessee has temporarily let out its factory on rent. The factory building is classified as plant and machinery. b) The Jurisdictional High Court in the case of CIT vs. Ajmira Industries Pvt. Ltd. (1976) 103 ITR 245 held that the if an assessee derives any income by exploitation of commercial assets whether itself or though other agencies, such income should be assessed under the head "business income". 4.1. Further in the c .....

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..... urpose of its business, and it was open to it if at any time it found that any part of its plant "for the time being" could not be advantageously employed for earning profit by the company itself, to earn profit by leasing it to somebody else. It is difficult to hold that the income thus earned by the commercial asset is not income from the business of the company that has been solely incorporated for the purpose of doing business and earning profits. There is no material whatever for taking the view that the assessee-company was incorporated with any other object than of carrying on business or trade. Owning properties and letting them was not a purpose for which it was formed and that being so, the disputed income cannot be sa .....

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