9911796707
TMI Blog1990 (5) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 and the carried forward loss was Rs. 9,28,005. The company suffered heavy losses in the two years of business. The position of the factory was not satisfactory. The company did not manufacture biscuits from March 1, 1973. The factory unit and office premises of the company were leased out to a tenant. This is the short and brief history of the assessee-company . In the proceedings relevant to the assessment years 1974-75, 1975-76 and 1976-77, before the Revenue authorities, the company represented that the business of the company was not discontinued. The Income-tax Officer negatived the contention. The finding of the Income-tax Officer was affirmed by the appellate authority and by the Income-tax Appellate Tribunal in second appeal. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o iota of evidence to sustain the contention raised by the assessee-company in these proceedings. The assessee, however, pointed out from the record that goods worth Rs. 762 was purchased after June 4, 1973 and, therefore, the company has not ceased to manufacture biscuits. This purchase of goods worth Rs. 762 is the proverbial swallow which when seen in the surfeit of evidence does not lead to the inference of summer. No other aspect is argued on this aspect. Therefore, we answer the second question against the assessee and in favour of the Revenue. As respects the first question, it is seen that the company owned pucca godown-cum-office premises with asbestos roof. The plinth area of the premises is 14,912.35 square feet. This premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee as income from 'other sources' ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee was not entitled to current depreciation allowance under section 32(1) of the Income-tax Act, 1961 ? (iv) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee was not entitled to the benefit of carry forward of earlier years' losses due to alleged discontinuance of its business ? (v) Whether, on the facts and in the circumstances of the case and in view of the finding of the Tribunal that rent received by the assessee was income from property, the Tribunal was justified in law in holding that payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s amounting to Rs. 37,468 was not deductible while computing income from property of the assessee ?" The five questions are alike in the assessment years 1975-76 and 1976-77. The company received Rs. 66,810 in the assessment year 1975-76, and this cannot be treated as income from business. This is the answer to the first question. The second question raises the issue whether the rent received by the assessee can be treated as income from other sources. Learned counsel for the assessee argued that the clause in the agreement of lease, annexure-B, contains recitals wherein the tenant agreed to pay rent not only for the building but also for letting out the furniture, fixtures, and telephone facility. The contention is that the building an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a part of furniture. So far as the first question is concerned, with reference to the assessment year 1975-76, we answer, that the business was discontinued, in favour of the Revenue. The rents received by the assessee should be treated as income from other sources. The answer is in favour of the assessee and against the Revenue. As respects questions Nos. 3, 4 and 5, in view of the evidence on record, no argument is advanced. Therefore, all the questions except as to rentals are answered against the assessee and in favour of the Revenue. As respects the assessment year 1976-77, to repeat, the first question is answered in favour of the Revenue and against the assessee. The second question is answered in favour of the assessee and again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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