9911796707
TMI Blog1989 (7) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances, parties and issues are common. 3. In this case we are concerned with the asst. yr. 1982-83. First assessment order is for the period from 1st April, 1981 to 30th Sept., 1981 and in the assessment order the status is shown as URF. The accounts were being maintained on mercantile basis. Return was filed on 30th Dec., 1984 showing income of Rs. 47,053. Income was being derived from renting out the property. A revised return was filed on 7th Dec., 1984 claiming therein interest payable to Central Bank of India as per decree passed by the learned Addl. Senior Sub-Judge, Ludhiana. According to the learned ITO the business was discontinued in the financial year 1976-77 and remained so upto the financial year 1981-82. According to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried on by the assessee-firm during the assessment period under consideration. According to the learned Authorised representative cl. 2 of the partnership deed showed that the business of the firm was of leasing out of building, etc. It was pointed out that the business might be done in a manner and in a number of ways and one of the ways was to let out a commercial asset. Exploiting the business asset was argued to be a business for earning profits and gains. Reliance by the learned Authorised representative before the learned AAC was placed on the ratio in the case of Capital Foundary Engg. Works, Kapurthala vs. CIT (1981) 11 TLR 673 (P H) wherein it was seen to have been held that letting out of commercial property constituted busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ratio in the case of CIT vs. Gemini Cashew Sales Corpn. (1967) 65 ITR 643 (SC). It was also pointed out by Shri Bhati that assessee did not reflect rent as business income and that in fact the income was shown from property. According to the learned Departmental Representative, the learned ITO assessed under that head and thus according to him it was no mistake as the assessee itself had not claimed any business activity. It was high lighted by Sh. Bhatia that interest could not be claimed against property income. 7. On behalf of the assessee, the finding under challenge was supported and again mention was made of the ratios recorded in the order under challenge. It was also pointed out by the learned Departmental Representative o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of leasing out of buildings etc. and thus in terms of that clause, the business's asset was exploited by putting it on rent and receiving the income in that manner. The bank interest became payable consequent upon decree by the learned Addl. Sub Judge, Ludhiana, and that interest was attributable to some loan which was earlier taken for running the assessee's business. Thus the interest was disallowed by the learned ITO as the earlier business was discontinued and subsequently business of renting out of the property was taken. This finding of the learned ITO is patently contrary to the ratio of the three cases relied upon by the learned Authorised Representative and decided by the Hon'ble Jurisdictional High Court and thus, in our vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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