TaxTMI 
TaxTMI 
2009 (11) TMI 548
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....greement permitted the lessee to build permanent structures therein. As against this, assessee in its cross-objection is aggrieved that the CIT(A) did not allow set off of carry forward losses against its lease receipts. According to the assessee, there was only a cessation of manufacturing activity and it had leased out only part of its business assets retaining the other part. Therefore, according to it the CIT(A) ought to have allowed the set off, in view of the decisions of the jurisdictional High Court in the cases of CIT vs. Ramnath Goenka (2002) 178 CTR (Mad) 340 : (2003) 259 ITR 26 (Mad) and Orient Hospital Ltd. vs. Dy. CIT (2009) 31 DTR (Mad) 230 : (2009) 315 ITR 422 (Mad). 2. The short facts are that assessee who was earlier en....
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....hat the accounts of the assessee mentioned cessation of manufacturing activity and sale of machinery, AO was of the opinion that the income from leasing had to be assessed under the head 'Other sources'. Reliance was also placed on the Hon'ble jurisdictional High Court decision in CIT vs. Central Studios (P) Ltd. (1973) 88 ITR 298 (Mad). Since the lease income was assessed under the head 'Other sources' the AO also did not allow set off of earlier years' losses from such amounts. 3. In its appeal before CIT(A), assessee submitted that only a portion of its land and building was leased out whereas balance was being used by the assessee itself. According to the assessee, the lease was for a short duration of five years and terminable by si....
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....could not be set off against such income where it was assessable under the head 'Income from house property' or 'Income from other sources', Relying on s. 72 of the Act, learned Departmental Representative argued that carry forward losses under the head 'Profits and gains of business or profession' could be set off in a successive year only against 'profits and gains of a business'. According to him assessee was admittedly not carrying on any business during the relevant previous year and therefore there was no question of any set off. 6. As against the above, the learned counsel for the assessee submitted that he is more aggrieved regarding non-acceptance of its claim for set off of carried forward losses, than regarding the head of inc....
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.... was continuing. This being so, the lease rental is clearly from exploitation of property which was neither a complex commercial activity nor a lease of property along with machinery, furniture and fittings. Therefore learned CIT(A) was justified in holding that such lease income had to be assessed under income from house property. 8. This leaves us with the issue whether carry forward business losses could be allowed set off against such lease rentals assessed under the head 'Income from house property'. For this claim, assessee has strongly banked upon decision of the jurisdictional High Court in CIT vs. Ramnath Goenka cited where their Lordships held that carry forward losses from assessee's business could be set off against dividend ....