TMI Blog1982 (2) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue expenditure allowable under the IT Act ? The question of law referred in M.C.C. No. 334 of 1978 is as follows : Whether, in the facts and in the circumstances of the case, the Tribunal was right in holding that the rental income accruing to the assessee from its godowns was not its business income and the losses incurred in the earlier years could not be carried forward and set off in asst. yr. 1966-67 ? 3. M.C.C. No. 39 of 1978 relates to the asst. yr. 1974-75 and M.C.C. No. 334 to the asst. yr. 1966-67. The assessee is a private limited company. The assessee carried on business of oil milling. From the statement of the case and the documents annexed to it in both the cases all that we can make out is that the assessee disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out such asset would not be business income, but where the business activity is temporarily suspended and there is no intention to go out of business, the business asset will continue to be business asset and income from letting out of such an asset will be treated as business income (see Kanga and Palkhivala, 7th Edn., Vol. I, at page 345). The Tribunal in deciding the appeals out of which the two references arise has not adverted to these principles. There is nothing in the orders of the Tribunal or in the statements of the cases from which it may be possible for us to infer whether the discontinuance of business was temporary suspension of the business or whether the assessee had the intention of closing the business or had closed the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 ITR 829. 6. For the reasons given above, we answer the questions as follows : M.C.C. No. 39/78 : (1) Without applying the correct test the Tribunal was not right in holding that the rental income was income from house property. (2) The answer to question No. 2 will depend upon the answer the question No. 1 after applying the correct principles. M.C.C. No. 34/78 : Without applying the correct principles the Tribunal was not right in holding that the rental income was not assessees business income and losses incurred in the earlier years could not be carried forward. The Tribunal will rehear the appeals and decide the aforesaid question after applying the correct principles in the light of the observations made above. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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