TMI Blog2022 (8) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... ce deigned to suit the requirements. As long as the Machinery was housed in the factory building and that too in operational condition, the building could not be let out to some other person. Considering this factual matrix, Ld. CIT(A) reached a conclusion that the letting of the two assets was inseparable. In para 4.2.6 of the impugned order, the Ld. CIT(A) has tabulated the lease tenure and lease rental to the received under the two agreement. The perusal of the same would show that the terms and conditions go hand-in-hand which would support the conclusion that the intention of the assessee was to lease out both the assets to the same lessee and the usage of the two assets was inseparable. Therefore, the conclusion of Ld. CIT(A) co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O. that rental income from letting out of the factory building as Income from Other Sources. 2. The Learned CIT(A) and the A.O. erred in not appreciating the expression if it is not chargeable to income tax under any of the heads specified in section 14, items A TO E of Sec.56(1). 3. The Learned CIT(A) and the A.O. erred in not appreciating the import and meaning of Sec.22 of the I.T. Act,1961. 4. The Learned CIT(A) and the A.O. failed to appreciate the fact of letting out of factory building was ONLY after complete Cessation of the business carried on by the Assessee. 5. The Learned CIT(A) and the A.O. failed to appreciate the fact of the letting out of plant machinery and that of factory building were thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts to lease out machinery as well as factory building. The rental income from factory building was offered as Income from house property against which the assessee claimed statutory deduction of 30%. The rental income from Machinery was offered as business income against which various business expenditures were claimed. The assessee reflected loss of Rs.44.76 Lacs in the return of income. 2.2 The Ld. AO held that income under both streams would be assessable as Income from other sources. In the process, all the other expenditure except travel, vehicle maintenance, audit fees and consultancy charges were disallowed since the same could not be allowed u/s 57(iii). The depreciation on factory building as well as Machinery was allowed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory building and could also be easily dismantled and moved to other premises. Thereafter, the factory building could be used for other purposes independently. However, as long as the Machinery was housed in the factory building and that too in operational condition, the building could not be let out to some other person. Considering the factual matrix, Ld. CIT(A) held that the letting of the two assets was inseparable and rent received would be assessable to tax as Income from other sources as provided u/s 56(2)(iii) of the Act. Therefore, the action of Ld. AO was upheld. 5.3 Regarding allowance of expenditure, Ld. CIT(A) held that Ld. AO was not right in disallowing the expenses including depreciation on car. Accordingly, Ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have rightly been held to be assessable u/s 56(2)(iii) which provide for assessment of income as Income from other sources where the assessee lets on hire machinery, plant or furniture belonging to him and also buildings, and the letting of the buildings is inseparable from the letting of the said machinery, plant or furniture, the income from such letting, if it is not chargeable to income- tax under the head Profits and gains of business or profession . Therefore, we confirm the stand of Ld. CIT(A) in the impugned order. The appeal stand dismissed. Assessment Year 2014-15 7. It is undisputed fact that the facts are pari-materia the same in this year. The impugned order is on similar lines and the grievance of the assessee is s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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