9911796707
TMI Blog1998 (4) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... e for Rs. 4,17,600 on 21st March, 1989, and rented it out to M/s Pramukh Steel Co. on the same date. In this month, for the remaining period of 10 days rent of Rs. 3,903 was earned. This income was declared as income under the head "business". The assessee claimed depreciation and investment allowance on the said machine. The AO was of the view that this transaction had taken place for the first time and also at the end of the year. According to him it was not the regular business of the assessee to purchase machinery and let it out. The AO, therefore, held the rent of Rs. 3,903 as income from other sources and disallowed the claim for investment allowance. The claim for depreciation was however, carried forward to the next year as there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequent year also it continued and there was no intention to let out only for this year. It was purchased for commercial exploitation and accordingly the rental income has rightly been treated by the CIT(A) as income from business. He further submitted that the AO himself had allowed depreciation and that implied that he had accepted the machinery as commercial asset. In support of his contentions, he relied upon the following decisions: (i) CIT vs. Vania Silk Mills (P) Ltd. 1978 CTR (Guj) 141: (1978) 112 ITR 701 (Guj); (ii) Smt. Kavit Sanghi vs. CIT (1982) 133 ITR 48 (MP); and (iii) CIT vs. Vikram Cotton Mills Ltd. (1988) 67 CTR (SC) 169 : (1988) 169 ITR 597 (SC). He further submitted that the reliance placed by the Departmenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the business. He is entitled to exploit it to his best advantage and he may do so either by using it himself personally or by letting it out to somebody else." We accordingly decline to interfere and dismiss the Revenue's appeal. 7. In the cross-objection, the first grievance of the assessee is that the CIT(A) is not justified in upholding the addition of Rs. 5,880 for the alleged unexplained investment in silver ornaments. At the time of search at the residence of the assessee silver ornaments weighing 980 gms. were found and the assessee explained that these belonged to her children and were received on various occasions like birth, mundan, etc. This explanation was not accepted by the AO and he accordingly made an addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an income of Rs. 6,14,000 during the year under appeal and has been an assessee assessed to income-tax and wealth-tax since long) we hold that there was no justification in rejecting the explanation of the assessee. We accordingly delete the addition of Rs. 5,880. 8. The next objection relates to upholding by the CIT(A) of the part of addition of Rs. 6,500 out of addition of Rs. 18,500 for the alleged low household expenses. During the course of search the assessee stated that her monthly household expenses were of Rs. 4,000 to Rs. 5,000. The AO accordingly estimated the expenditure of Rs. 60,000 and considering the withdrawals of Rs. 18,500 shown by the assessee the balance of Rs. 41,500 was added towards household expenses. 8.1. On ..... X X X X Extracts X X X X X X X X Extracts X X X X
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