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2016 (12) TMI 553 - AT - Income TaxLease charge of the building - taxability under head income from house property or business income - restricting the claim of deduction u/s 24(a) on the rental income considered as ‘’Income from other sources’’ - Held that:- It is observed that the annual rental value was calculated by the AO on the basis of facts revealed in the course of survey conducted u/s 133A of the Act. The statement of the Director of the company was recorded in which he admitted that the business of the assessee company had been completely closed in Sept. 1999 and there was no business activity in the assessee company except rental income. It is noted that the ld. AR of the assessee had not advanced any specific submission as to the sustenance of the action of the AO by the ld. CIT(A). Thus the issue of lease charge of the building is taxable under the head income from other sources as there is no sufficient evidence to establish that income should be charged under the head income from house property or business income. The ld. CIT(A) has rightly restricted the deduction u/s 24(a) of the Act as rental income was assessed under the head Income from other sources. Thus not inclined to interfere with the order of the ld. CIT(A) which is sustained. - Decided against assessee Income earned from leasing of plant and machinery - income from Other Sources or Income from business - Held that:- It is noted from the record that the assessee had leased out its plant and machinery and earned the rental income of ₹ 96,000/- due to close down its business since Sept. 1999 which has been explicitly admitted by the Director of the Company. It is also noted from the ld. CIT(A)’s order that the ld. AR of the assessee could not controvert the findings of the AO on this issue. When the Director of the assessee company had admitted that the assessee company had closed down its business due to losses and there was no business activity in the assessee company except rental income then it cannot be considered as business income of the assessee. Hence, we concur with the findings of the ld. CIT(A) which is sustained - Decided against assessee Disallowance of business expenditure - Held that:- The assessee could not controvert the findings of AO before the ld. CIT(A) and the ld. CIT(A) took the support of the same contentions of the Director of the assessee that the assessee company had completely closed down its business in Sept. 1999 and there was no business activity in the assessee company except the rental income . Once the business income was treated as income from other sources by the AO, the claim of the expenses of the assessee was held unjustified by the ld. CIT(A) and he confirmed the action of the AO. Thus find no reason to interfere with the order of the ld. CIT(A). - Decided against assessee Treatment to Misc. Income - under the head Income from other sources or business income - Held that:- The assessee could not controvert the findings of AO before the ld. CIT(A) and the ld. CIT(A) took the support of the same contentions of the Director of the assessee that the assessee company had completely closed down its business in Sept. 1999 and there was no business activity in the assessee company except the rental income. Hence, when there was no business run by the assessee company during the year then addition made AO under the head Misc. income was rightly confirmed by the ld. CIT(A) - Decided against assessee
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