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Business loss or other income

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21 July 2016 We have given the plant and machinery on Rent P&L of which is as follows:
Gross Rental Income per annum Rs 18 Lacs
Depreciation on account of Plant & Machinery Rs 12 Lacs
Other expenses related with Plant & Machinery Rs2 Lacs
Nett Profit Rs. 4 Lacs
In this case whether Rental Income of Rs 18 Lacs will be Business Income or Other Income.
If it is other income can we claim set-off of business loss of Rs. 14 Lacs before 31st July 21, 2016.
Please guide me and oblige.,
Yrs affectionately
Tarique rizvi – 982 1630 130

21 July 2016 If it is the regular BUSINESS of the assessee to rent out plant and machinery, then it shall be regarded as business income, although shown under income from other sources.
The point to be noted is CHARACTER of income is not changed even though it is shown under some other head of income. The carried forward business loss can, therefore, be set off against this.

21 July 2016 Dear Mr Amol Wishes & Rgds Tks for the best guideline from yours. Earlier nature of the business of the assessee was job work of freezing/processing of foodstuff through the said plant but due to certain reason the assessee had to shut down the business and has given the total plant & machinery on rent. Please guide me what to do in this case.




21 July 2016 is it proprietory or partnership? and is he carrying the business under trade name or individual name?

22 July 2016 It is a partnership firm consisting of five partners and earlier were carrying the business of job work of freezing/processing of foodstuff under trade name through the said plant but at this moment of time the business has temporarily been shut down due to certain reasons and the plant has been given on rent to some other party for the same job work of freezing/processing of foodstuff. Further as & when the rent agreement gets expired, the partners will once again carry the same business in the same name and style.

22 July 2016 You are not getting it.....anyway......see the point is
01. If the partnership deed empowers the partners to do any business? Say renting the plant and machinery...(If it is not expressly provided in your partnership deed, make the proper alterations...that's all) Since you are doing it in the same name...the income has to be considered as business income...(Provided the partnership deed empowers the same)
Hope you are picking up what i mean

22 July 2016 Dear Mr Amol
Rgds
Wish you all the best all the time. You are really an extra ordinary professional as these issues not body till date has risen. Okey let me go through the partnership deed. I have picked up very well. Once again lot of thanks for your keen interest to guide me.

22 July 2016 You are most welcome. Just to add the simplicity.....once the business of renting is permitted by partnership deed, it will be classified as business income.... (Such types of cases are many in number epecially in the industrial developement areas like MIDC, GIDC, UPIDC and so on....)






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