Law: Income Tax Act, 1961

Section: 56(2)(ii)

(a) Income-tax---Business income or income from other sources ---Assessee discontinuing business of publishing newspapers---Machinery and vehicles let to sister concern---Letting does not relate to business---Machinery and vehicles not exploited as commercial asset---Hire charges assessable as income from other sources---Not as business income---Indian Income Tax Act, 1961, S.56(2)(ii). (b) Income-tax---Profits chargeable to tax---Remission of trading liability---Benefit by way of remission need not be in cash---Can be by book adjustment ---Assessee dealing in share---Provision made by assessee for interest payable on sums borrowed from share brokers---Lower sum found due at time of settlement of accounts---Difference written back in accounts---Is a remission of liability--¬Taxable under SA1(1)---Indian Income Tax Act, 1961, SA1(1). (c) Income-tax----Business income or income from other sources ---Assessee owning property and letting portions to various tenants---Rental agreement providing for payment of rent and air-conditioning charge ---Assessee not doing business of letting property---Provision of amenities not a separate business venture---Air-conditioning charges shown in general rent receipt---Not separately taxable as business income---Taxable as income from other sources. The assessee was a private limited company publishing newspapers. From the year 1969 it discontinued that activity, but got the newspapers published through its sister concerns. Its own printing machinery and motor vehicles were given on hire to those concerns and the income received by way of hire charges was shown as income from "other sources" and the Department also accepted it. But for the assessment year 1976-77 the assessee changed the head of income from "other sources" to "business". This was not accepted by the Income-tax Officer who taxed the hire charges as income from other sources. This was confirmed by the Tribunal. On a reference: Held, that the assessee must show that it was doing the business and the income was earned in the course of doing such business. Admittedly, the assessee had discontinued its business of printing and publishing newspapers from 1969 onwards…

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