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2016 (5) TMI 66 - AT - Income TaxTreatment to commission income - Profits and gains of the business or income from other sources - Held that:- We have perused the memorandum and articles of the company wherein object No. 1 is stated to be that of to manage, administrate, operate, maintain into carrying on the business of hotels and related properties and further to act and work as consultant commission agent for all over in India and abroad. We are of the view that commission income of ₹ 43,700 which has been generated from real estate business is widely covered under the object clause of the memorandum of association of the company. Further, the earning of commission income is itself a separate business of the company as it is an activity of arranging and helping in negotiation of real estate. It is an organised effort of the assessee-company to generate the revenue. According to section 2(13) of the Income-tax Act business has been defined as "business" includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture". According to us, commission income earned by the assessee is chargeable to tax under the head of "Profits and gains of the business" only. As business, income it specifically falls under the specific heads of income as provided under section 14 of the Income-tax Act it cannot be taxed under the residuary head of income Chargeability of interest on fixed deposit receipt as income from other sources - view of the assessee that it should be abated against capital work-in-progress - Held that:- Interest income earned by the assessee is also inextricably linked with the business of the company and therefore the Assessing Officer and the Commissioner of Income-tax (Appeals) both erred in applying the ratio of decision of the honourable Supreme Court in the case of Tuticorin Alkali Chemicals and Fertilizers Ltd. v. CIT [1997 (7) TMI 4 - SUPREME Court ]. Therefore, the same is required to be abated against the cost of work-in-progress of the hotel of the assessee. Therefore, we hold that the Assessing Officer and the Commissioner of Income- tax (Appeals) both yield in this case in taxing the interest income of fixed deposit receipt as income from other sources. Disallowance of claim of depreciation on earned tools used for the business - Held that:- According to us, the tools and machineries, which are purchased by the assessee, are not eligible for depreciation but they themselves are cost of construction of the hotel building. Therefore, we find no infirmity in the order of the Assessing Officer and the Commissioner of Income-tax (Appeals) in not granting the depreciation on the assets
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