M/s A ltd. owns a Stone crusher costing Rs 10 lakhs. It is the intention of the firm to own the asset and use it for its Stone crushing operations; the Business it is in. Due a temporary lull in the business, the Asset is Leased out as Operating Lease for a period of 2 years on lease rentals of Rs 1,00,000/- per annum
In the light of the above, answer the following Questions---
- How would you, as an Assessing Officer, treat these rentals for the Assessment year following, in the Returns filed by M/s Altd.? Under what head of income would you subject these lease rentals to tax?
- Would it make a difference to your decision if M/s A ltd. had averred in its returns filed with you, that it had not planned to use the stone crusher for the purposes of its business and the lease was very much an ‘intentional one’
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