The Income Tax Appellate Tribunal (ITAT), Kolkata, has ruled that proceeds from a holiday home, owned by a co-operative credit society, will be taxable under Income from Other Sources head of the Income Tax Act 1961
Amid a query raised by appellant The Electro Urban Co-Operative Credit Society Ltd, an assessing officer had found that proceeds from a holiday home, owned by a co-operative credit society, will be taxable under Income from Other Sources head. On which the Principal Commissioner of Income Tax, Shri Rajiv Jain, IRS, had proposed to revise the assessment made by the Assessing Officer where he concluded that the proceeds from a holiday home, owned by a co-operative credit society, should be taxable under Income from Other Sources.
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The tribunal overruled the issue raised by the principal commissioner and said that the Assessing Officer’s decision to tax the proceeds from a holiday home, as owned by the co-operative credit society, under Income from Other Sources head was precise as he had studied the very issue and then came to such a conclusion.
“The assessment of assessee’s income derived from holiday homes claimed as income from other sources in the computation but held as income from the business during assessment in subsequent AY 2015-16; stands decided in its favor in the CIT(A)’s an order dated 28.02.2018 (page 18 in records) i.e. much prior to the PCIT’s issuing Section 263 show cause notice dated 11.04.2018. This tribunal’s decision in the Kolkata Reserve Bank Employees Co-operative Credit Society Ltd. ITA 2253/Kol/2016 holds that such an income from holiday homes is not eligible for Section 80P(2)(i) deduction being not business income. It is crystal clear therefore that the head of assessee’s income derived from its holiday homes i.e. whether it is income from house property as per the PCIT, business income going by the Assessing Officer in assessment and the CIT(A) and the residuary head of other sources in its computation; respectively, is purely a debatable issue. It thus could not be held that the Assessing Officer’s action sought to be revised as erroneous and causing prejudice to the interest of the Revenue,” the Tribunal said.
