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Section 56 of the Income-tax Act, 1961 - Income from other sources - Chargeable as - Assessee-company had constructed a hospital building and was running a hospital - As it suffered loss in running hospital, hospital building along with equipments and machineries was leased out to another company - Assessee claimed leased income as business income and set off earlier business losses against same - Assessing Officer treated income from lease of hospital as 'income from other sources' and disallowed setting off of earlier years business losses - Tribunal held that income from lease had to be treated as 'income from other sources', but hospital building being a business asset, lease income therefrom would be allowed to set off previous years business losses - Whether, on facts, order of Tribunal was justified - Held, yes CASE REVIEW CIT v. Chennai Properties & Investments Ltd. [2004] 266 ITR 685/ 136 Taxman 202 (Mad.); Universal Plast Ltd. v. CIT [1999] 237 ITR 654/ 103 Taxman 493 (SC) [Para 7]; and CIT v. Ramnath Goenka [2003] 259 ITR 26 (Mad.) [Para 4] followed. Decision of Tribunal in IT Appeal No. 2323(Mad.) of 2004, dated 15-9-2006 - affirmed. [Para 7] CASES REFERRED TO CIT v. Chennai Properties & Investments Ltd. [2004] 266 ITR 685/ 136 Taxman 202 (Mad.) [Para 2], Universal Plast Ltd. v. CIT [1999] 237 ITR 454/ 103 Taxman 493 (SC) [Para 2] and CIT v. Ramnath Goenka [2003] 259 ITR 26 (Mad.) [Para 2]. K. Venkatanarayanan and Subbaraya Aiyar Padmanabhan for the Applicant. Haja Nazirudeen for the Respondent. JUDGMENT B. Rajendran, J. - The assessee has preferred the appeal against the order passed by the Income-tax Appellate Tribunal, in ITA. No. 2323/Mad./2004 dated 15-9-2006. 2. (i) The assessee-company had constructed a hospital building and it was running the hospital from the assessment years 1991-92 to 1997-98. As the assessee-company suffered loss in running the business, the hospital building along with various equipments and machineries were leased out to Apollo Hospitals Enterprises Ltd., on a monthly lease of Rs. 3,00,000 per month and the same was claimed as business income against which earlier business losses were set off. (ii) The…

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