Treatment of rent received for factory along with machinary

Memorandum of association should permit such a source of income. 

I think depreciation can be claimed because the machine is in use and is fetching rental income.

TDS deduction for building shall be at 10% and for plant & machinery at 2%. 

Wait for others to reply.

Correct TDS @ 10% for rent from  building and 2% for rent from machineries. But depreciation cannot be claimed as there is no manufacturing operation carried on by the owner.

Payment by way of “rent”

Here ‘Rent’ means any payment, by whatever name called, under any lease, sub lease, tenancy or any other agreement or agreement for the use of (either separately or together) any –

·         Land, or

·         Building (including factory building), or

·         Machinery, or

·         Plant, or

·         Equipment, or

·         Furniture, or

·         Fittings

Whether or not any or all of the above are owned by the payee.

Here income would not be taxed as business income but wld be taxed as income from other sources, as there is no seperate contract for items given on rent. Depreciation, repairs etc would be available.

Is there any perticular section or case law applicable to decide whether to treat this as other source or business income and what expenses can be charged against the revenue generated in the form of rent ?

Any revenue expense which u have made on building, plant & machinery which u have given on rent can be claimed.