INCOME FROM COMPOSITE LETTING OUT  OF BUILDING, MACHINERY, PLANT OR FURNITURE  [sec. 56(2)]  

• If an assessee lets on Hire machinery, plant or furniture and also building & letting of building is inseparable from letting of machinery, plant, furniture, then income from such letting is taxable under Income from Other Sources if not taxed as Business Income. Broadly classifying following nature of rent received on Hire of Assets specified above is taxed under Income from Other Sources:

• If there is letting of Building as well as the assets & both form Part & Parcel of the same transaction since the two lettings are INSEPARABLE, e.g., Theatre Building and its Furniture is taxable under the Head Income from Other Sources, if not charged as Business Income. 

• If there is letting of Building as well amenities but without any letting of Assets, then this section is not applicable & the whole of such Income earned will be taxed under Income from House Property. 

•  Permissible Deductions from Income from letting out of Machinery, Plant etc.  

• Current repairs to the premises held otherwise than as a tenant;

• Insurance Premium towards physical safety of the premises;

• Repairs & Insurance of Machinery, Furniture etc.

• DEPRECIATION based on Block of Assets in the same manner as calculated u/s 32 in Profits & gains from Business & Profession.

• Any other expenditure not of Capital nature and should be incurred wholly & exclusively for earning such Income.