TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 623
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....act and in the circumstance of the case and in law of the learned NFAC Commissioner of Income Tax (Appeals) Delhi, has erred in disallowing and adding back an amount of Rs. 1,23,72,556 on account of Business loss Treat as a Income from Other Sources which is not considered Business Income of Karkhana, AO has treat as Income from Other Sources. 2. On the fact and in the circumstance of the case and in law of the learned NFAC Commissioner of Income Tax (Appeals) Delhi, has erred in disallowing and adding back an amount of Rs. 26,86,106 on account Loss is not carried forward to next year The appellant craves for the leave, add, alter, amend, modify and delete any or all the above grounds of appeals before or at the time of th....
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....ts and therefore has to be treated as 'Income from Other Sources'. Based on these observations, the total income of the assessee prior to setting off of the brought forward business loss which amounted to Rs. 26,86,106 has been treated as Income from Other Sources' and no further deduction under Chapter VIA has been allowed and income assessed at Rs. 26,86,106. 4. Aggrieved assessee preferred appeal before ld.CIT(A). However, ld.CIT(A) observed that the resultant activity is passive income generating activity and does not demonstrate any continuity or integration with the appellant's primary business and therefore the loss carried forward under business income cannot be set off against income from other heads. Ld.CIT(A) dismissed the ass....
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....m Other Sources and not allowing the set off of brought losses and also the claim of deduction under Chapter VIA of the Act. I note that the assessee owns a sugar factory for past many years and it is engaged in the business of manufacturing sugar which includes crushing activity also. A sort of partnership deed cum Agreement has been entered into by the assessee with Chhatrapati Sahu Sahakari Sakhar Karkhana Ltd. (in short 'sahu SSK') on 27.08.2009. Copy of the same is placed at pages 23 to 28 of the paper book. On perusal of the deed, we notice that it is not in the nature of partnership deed but it is a Collaboration Agreement. There is no clause about sharing of profit or losses. It only talks about certain terms and conditions regardin....
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....d unsecured loans are standing in the name of assessee which also include working capital loan outstanding at Rs. 9.01 crore, capital term loan approx. Rs. 5.93 crore and secured loans amounting to Rs. 24.02 crore. I note that the arrangement between assessee and Sahu SSK is with the basic intention of exploiting the full potential of the sugar factory which the assessee was not able to achieve while working on its own. Such arrangement made by the assessee is with the intention of re-construction of the assessee society and to cover up the losses incurred in the past and in no way show to discontinue the business and this temporary arrangement of letting out the assets is purely a business decision so as to maximise the returns and profits....
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....cumstances of the case so found, it could not be said that such a finding of the Tribunal was either perverse or not sustainable. Accordingly, the view taken by the High Court that the lease rent was assessable as business income was to be upheld. Decision of the Allahabad High Court in the case of CIT v, Vikram Cotton Mills Ltd. [1977] 106 ITR 829 affirmed." 10. On examining the facts of the instant case in light of above judgment and other decisions relied on by ld. Counsel for the assessee, I find that it is a case of temporary letting out of the factory premises to another concern for carrying out the manufacturing activity and even from the revenue so earned by the other person the assessee will receive the user ch....