KANDASWAMY SHOPPING COMPLEX AND LODGING Vs. ASSISTANT COMMISSIONER OF INCOME TAX
INCOME TAX APPELLATE TRIBUNAL
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S. Kannan, Accountant Member -
(1.) THESE two appeals by the assessee which are directed against the common order dated 29-5-1991 of the CIT(A), Coimbatore relating to the assessment years 1988-89 and 1989-90, were heard together and are disposed of by a common order.
(2.) The assessee, a firm of three partners, was previously doing business of running a lodge, the income from which was assessed to tax under the head 'Profits and gains of business' right upto and including assessment for the assessment year 1987-88. During the previous year relevant to the assessment year 1988-89, it discontinued the lodging business and let the rooms on monthly basis to various parties, such as small shop owners, advocates and others. Certain additions to the existing building were also made and let to the State Bank of India/P & T Deptt.
The assessee filed its return of income for the assessment year 1988-89 disclosing an income of Rs. 85,930 under the head 'Profits and gains of business'. The return was duly supported by an income and expenditure statement and balance-sheet.
(3.) THE assessee's case before the Assessing Officer was that the building in question was earlier being used as a business asset in the lodging business of the assessee. On the lodging business being discontinued, the rooms in the building (including the units in the addition made in the building) were let on rent to various parties. Further, such letting entailed employment of a few persons for attending to the maintenance of the building; and that, therefore, the rental income should be brought to charge under the head 'Profits and gains of business'.;
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