TaxTMI 
TaxTMI 
2018 (5) TMI 47
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.... Ground No.2 is related to the assessment of income under the head "income from other sources" against the admission of income by the assessee under the head "business income". The assessee filed the return of income declaring loss of Rs. 1,51,438/- under the head "business income". The assessee derives income from leasing of its rice mill comprising of building and machinery. The A.O. selected the case for scrutiny and found that as per the lease deed, the rent accrued was Rs. 4,81,000/- towards building rent, machinery rent, municipal tax, land tax, etc. against the admission of income of Rs. 4,50,000/- as rent received. The assessee admitted the income under the head 'business income'. The assessing officer further observed that the asse....
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.... godowns and machinery and leased the premises to another rice mill i.e. M/s. Sri Kanyaka Parameswari Rice Mill Contractors Company, (hereinafter called as a 'lessee') for annual lease rent of Rs. 4,50,000/-. Since the assessee has constructed a commercial asset and exploiting the commercial asset, the assessee has rightly offered the income under the head 'business income'. The ld.AR further argued that the intention of the assessee is to do business by exploitation of commercial asset, thus the income of the assessee is to be assessed under the head 'business income' but not under the head other sources. The Ld.AR argued that the orders of Ld. CIT(A) may be set aside and direct the A.O. to assess the income under the head 'business income....
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....hat letting out of building and letting out of fixtures, fittings, air conditioning, plant, furniture were inseparable rental income is assessed as income from other sources. Hon'ble ITAT Bangalore Bench in the case of T.R. Mills Pvt. Ltd. Vs. ITO Ward-12(2), Bengaluru in 84 taxmann.com 74 (Bangalore Trib.) held that the business asset including of fittings and fixtures was let out but after discontinuing business activity of textile mill, rental income could not be treated as income from 'house property' and the same would be assessed as income from other sources. In the instant case, the assessee owns a rice mill and let out the rice mill to another rice mill and receiving the rental income without carrying on any business activity or ren....
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....to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years." 9. The unabsorbed depreciation of earlier year is considered as the depreciation allowance of the succeeding year, therefore, the unabsorbed depreciation allowance appearing, if any shall be added to the allowance for the depreciation of the succeeding year and deemed to....
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....essing Officer himself allowed similar set off under section 143(3). It is also noteworthy that for not allowing this set off, in this year, the Assessing Officer has not assigned any reason whatsoever. Thus, in view of above legal position, it is held that whatever income stands assessed under the head income from other sources should be allowed to be set off against B/F depreciation and B/F losses. In result this ground of appeal is allowed. [Para 15] 10. The similar views are expressed by the Hon'ble courts as under: CIT Vs. Sahu Rubber Pvt. Ltd. 179 ITR 29 (Bom) CIT Vs. Deepak Textile Industries Ltd. 210 ITR 1029 (Guj) CIT Vs. Virmani Industries Pvt. Ltd. Etc. 216 ITR 607 (SC) 11. Following the case laws cited (supra), since t....
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....uctions, namely - ................................ (iii) Any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income;" 14. In the instant case, the assessee has claimed deduction in respect of interest paid to bank, interest paid to others, interest paid to partners, establishment charges, electricity development charges and remuneration to partners. The Ld. A.R. argued that except the interest and the remuneration paid to partners, the remaining expenditure incurred by the assessee is for earning the income and the same is allowable u/s 57(iii) of the Act. The interest paid to others is related to the funds borrowed by the assess....