TMI Blog2016 (12) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossly erred in holding that the income of ₹ 96,000/- earned by the appellant from leasing of plant and machinery, according to the requirements of the occupier, is to be assessed as income from Other Sources and not under the head Income from business as claimed by him. Because, while doing so, the ld. authorities below had not appreciated the intention / prime object of the appellant. 4. That under the facts and circumstances of the case and in law, the authorities below have grossly erred in not allowing business expenditure of ₹ 2,48,355.78 (Auditor s remuneration of ₹ 11,240/- , Misc. other expenses ₹ 9,732.50/-, Rent rates taxes ₹ 12,087/-., Bonus ₹ 7,200/-, Employer contribution to ESI ₹ 3,420, ROC filing fees ₹ 900/-, Repairs and Maintenance ₹ 25,609/-, Salary ₹ 42,000/-, Postage and Telephone Expenses ₹ 27,410/-, Vehicle Running Expenses ₹ 57,758/-, Entertainment Expenses ₹ 5,929/-, Financial Expenses ₹ 6,656.28/-,Depreciation of Motor car ₹ 38,414/-) even when these are disallowable expenditures under the provision of the Act and there was sufficient material with him to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... round No. 2. The AO had considered the rental income of ₹ 84,000/- under the head of other sources and hence the deduction u/s 24(a) has been consequently decreased by ₹ 25,200/- for which the ld. AR prayed for allowance of consequential deduction u/s 24(a) amounting to ₹ 25,200/- Observation of the ld. CIT(A): I have considered the facts of the case and the submission made. The decision given in Ground No. 1 is against the appellant hence the same is decided against the appellant and the action of the AO in this regard is fair and reasonable. The same is sustained. The appellant fails on this ground. 2.2 During the course of hearing the ld. AR of the assessee has not made any oral submission except relying on the written submission filed before the Bench which has been taken into consideration for adjudication of the grounds of appeal of the assessee. 2.3 The ld. DR relied on the orders of the authorities below. 2.4 I have heard the rival contentions and perused the materials available on record. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y under the head business income. Observation of the ld. CIT(A) :-I have considered the facts of the case and the submission made. The A/R could not controvert the findings of the AO. In the assessment order, the AO clearly stated that on the basis of statement recorded of director of company wherein he categorically admitted that the business of the assessee company had been completely closed down in Sept. 1999, since there was no business activity in the assessee company except rental income. Hence, there is no business run by the company during the year under consideration and income from lease cannot be considered as business income. Therefore, the addition made by the AO is hereby sustained. The appellant fails on this ground. 3.2 During the course of hearing the ld. AR of the assessee has not made any oral submission except relying on the written submission filed before the Bench which has been taken into consideration for adjudication of the grounds of appeal of the assessee. 3.3 The ld. DR relied on the orders of the authorities below. 3.4 I have heard the rival contentions and perused the materials available on record. It is noted from the record that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dismissed. 5.1 Apropos Ground No. 5 of the assessee, the facts and observations as narrated by the ld. CIT(A) in his order is as under:- The assessee company earned misc. income at ₹ 13,855/- which was shown under the head business income in its original as well as revised return. Thereafter during the assessment proceedings, the AO assessed the misc. income under the head income from other sources. During the course of appeal hearing, the A.R. for the appellant submitted that as per Companies Act, companies are required to prepare its financial as per the Schedule VI. As per its requirement the income which are incidental and ancillary to business are shown as misc. income under direct income whereas as per Income tax Act, 1961 income from sources means which is not a business income. Hence, misc. earned by the assessee company should be considered under the head business income. But the ld. AO has not considered the above facts and assessed the misc. income under the head other sources. Hence, you are requested to kindly consider the fact and allow the misc. income under the head business income. Observation of the ld. CIT(A) : I have considered the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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