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2012 (11) TMI 275 - AT - Income TaxBifurcation of Income as income from house property and PGBP – Rental vs.Service receipts - Following the decision of Supreme court in case of [Sultan Brothers vs CIT 1963 (12) TMI 4 - SUPREME COURT] Held that:- If a business premises or factory is let out by the assessee for a temporary period, then let out of the factory premises become essential for letting out the machinery and plant and furniture of the factory. Only in such an exceptional case, whether the primary purpose and intention was to let out the machinery, plant or furniture and not the building - the rent received for the building is to be assessed as income from other sources. None of the parties have disputed the correctness of the ratio of 60:40 for bifurcating the receipts for rental and service charges by the Commissioner of Income Tax (Appeals). Since the income has been bifurcated under two heads as income from house property and income from business and profession and accordingly only 40% of the expenses claimed by the assessee were allowed against the income from business. As such, expenditure on temporary shed was not allowable as per the order of the Commissioner of Income Tax(Appeals). The assessee is entitled for cost of temporary shed to be treated as cost of the project carried by the assessee.
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