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2009 (11) TMI 548 - ITAT MADRAS-AIncome from House Property - there was no manufacturing activity during the relevant previous year and it had sold its machinery. The lease was for a period of five years and only the land and building were leased. Assessee had no case that such a lease was on account of a temporary lull in business or that it had resumed the possession of the property. But on the other hand the lease 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. Carry forward business losses - set off against lease rentals assessed under the head 'Income from house property – cl. (i) of sub-s. (1) of s. 72 clearly stipulates that carry forward loss of business shall be set off only against profits and gains of any business or profession carried on by an assessee. - Clearly assessee was not carrying on any business during the relevant previous year. Therefore its claim that carry forward business losses ought to have been considered for set off against lease rentals cannot be accepted.
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