Hire charges treatment

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Shruti Mishra (Querist)
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24 November 2011 hello,

my client has group companies engaged in stuffing/destuffing at CFS. out of which a proprietory concern was idle with no operations.it lent its equipments on hire to its group concern and the income accrued is treated as other sources and not business income.

is the treatment correct.??

please recommend some case studys.

CA Satish Badve

CA Satish Badve (Expert)
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24 November 2011 No, It should be treated as business income.

Shruti Mishra

Shruti Mishra (Querist)
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24 November 2011 but sir, letting a machinery on hire is not the core business of the concern...

then y shud it be treated as business income.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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25 November 2011 If the idle situation is permanent , income can be offered under 'income from other sources'. If not, under 'profits and gains of business or profession' though letting out is not the business.

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