Letting machinery on rent treated as income from other sources when no business activity was carried on.

Lease money received from letting machinery on hire was not business income where the assessee was not carrying on any business during the relevant year and merely rented out the imported rotary press on monthly rent. On facts found substantially similar to an earlier decision, the income did not arise from business activity and was therefore assessable as income from other sources, not business income. The reference was answered in the negative, in favour of the Revenue and against the assessee.

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Issues: Whether lease money received from letting out machinery on hire constituted business income or income from other sources.

Analysis: The assessee was not carrying on any business during the relevant year and had merely let out the imported rotary press on monthly rent. On facts found to be substantially similar to an earlier decision, the income derived from such letting could not be treated as arising from business activity.

Conclusion: The receipt was assessable as income from other sources and not as business income. The answer to the reference was in the negative, in favour of the Revenue and against the assessee.

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