Section 44ad applicability

Extract from : Kirloskar Systems Limited Vs. Commissioner of Income Tax (Appeals) - I, Bangalore dt.18.10.2013 for Assessment Year 2010-11.

" section 56(2) provides that income from machinery, plant or furniture belonging to the assessee and let on hire, if the income is not chargeable to income-tax under the head 'profit and gains of business or profession.' Clause also provides that where an 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 incomefrom such letting, if it is not chargeable to income-tax under the head 'profits and gains of ITA No.2/Bang/2014 business or profession'. Therefore, the intention of the Legislature is explicit. The provision is clear i.e., if the letting of the building, plant, machinery and furniture is inseparable, the income from such letting should ordinarily fall within the head 'profits and gains of business or profession'. But for any reason, if it does not fall under that head, it shall fall under the head income from 'other sources', but certainly not under the heading income from House property."