2009 (6) TMI 49

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....d 15.9.2006. 2. (i) The assessee company has constructed an hospital building and it was running the hospital from the assessment year 1991-92 to 1997-98. As the assessee company suffered loss in running the business, the hospital building along with various equipments and machineries was leased out to Apollo Hospitals Enterprises Ltd., on a monthly lease of Rs.3,00,000/-per month and the same was claimed as business income against which earlier business losses were set off. (ii) The Assessing Officer treated the income from lease of the hospital as 'income from other sources' and therefore disallowed setting off the earlier years business losses and assessed the lease income from the hospital as 'income from other sources'. &nbs....

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....ome was still permissible under law as per the decision reported in 259 ITR 26 (CIT V. RAMNATH GOENKA) and partly allowed the appeal. The Tribunal has only partly allowed the appeal filed by the Revenue that the income from the lease income has to be treated as "income from other sources"; but at the same time the lease income may be allowed to set off the previous years losses. Aggrieved against this, the present appeal has been preferred by the assessee. 3. Heard both. 4. The only question of law, which is sought to be pressed into service by the assessee, is as follows: "Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the income from lease of Hospital, after giving a findin....

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....ed forward can be set off against dividend income from the shares held as stock-in-trade. This finding of the Tribunal is as follows: 9. However, we find force in the alternative contention of the Id. counsel of the assessee that carry forward of loss is to be allowed to set off even against the income from other sources, if the assets were business assets. We find that the Hon'ble Madras High Court in the case of CIT Vs. RAMNATH GOENKA (supra) has held that business loss carried forward can be set off against dividend income from shares held as stock-in-trade, even if such dividend was assessable under head income from other sources. Therefore, we direct the AO to allow set off of carried forward business even against the head income fr....