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2016 (4) TMI 873 - AT - Income TaxIncome from house property V/S Profits and gains of business or profession - nature of income - head of income - Held that:- The definition of rent includes any payment by whatever name called, for use of buildings including factory buildings, equipment, furniture or fittings. Even if machinery was leased, the consequent rent comes under the definition. But machinery lease can not be considered under ‘income from House property’. That indicates that just because TDS was made u/s. 194-I, it cannot be treated as ‘house property income’ as the rent definition includes lease of equipment, lease of furniture, fittings which cannot be considered as ‘house property’. AO’s opinion that since TDS made u/s. 194-I, incomes are to be assessed under head ‘income from house property’ can not be accepted. Moreover, even if assessee has let out property but, when the Memorandum of Association permits the business of letting out of properties as such, the income cannot be brought to tax as ‘income from house property’ as held in the above said case of Chennai Properties & Investments Ltd., Vs. CIT [2015 (5) TMI 46 - SUPREME COURT]. Therefore, both on facts of the case and also on law, as established by the Hon'ble Supreme Court in the above said case, receipts of assessee cannot be brought to tax under the head ‘house property’. The same is to be assessed under the head ‘Profits and gains of business or profession’ only. Allowance of expenditure - assessee’s contention that AO has arbitrarily, without giving opportunity, restricted the expenditure - Held that:- Since this issue was not examined by the CIT(A) in his order and since we are of the opinion that AO arbitrarily arrived at disallowance at a certain percentage, we are of the opinion that allowing of expenditure is to be re-examined by the AO. Assessee is directed to furnish necessary evidence in support of its claims. To that extent, orders of AO and CIT(A) are set aside.
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