ITAT: Rental Income From Commercial Properties Equal Like House Property Income

The income tax Appellate Tribunal (ITAT) stated that the AO is taking the rental income via commercial properties as the income beneath the head ‘House Property’ rather than the Income from Business.

The taxpayer is the owner of Discovery Estates Pvt. Ltd. which owned the construction businesses of the commercial complex and also earning the rental income. The return of the income was furnished by the taxpayer for the year beneath the consideration mentioning the income of Rs 2,67,02,200. The case opted for the scrutiny beneath section 143(3) of the Income Tax Act, 1961 Get to know complete guide of TDS provisions under income tax act 1961 at here. Also, we include several topics as TDS returns, TDS due dates, penalty & more. Read more was finished post treating the rental earning beneath the head income from house property rather than the income beneath the head ‘Profit and Gains of Business or Profession’ proposed through the taxpayers in the return of earnings.

The CIT(A) subsequent to the finding of the Delhi high court for the case of the taxpayer itself in the previous years sustained the finding of the assessing officer. The taxpayer upon the dissatisfaction is in appeal prior to the counsel urged the areas as asked again in the above.

The two Judges Suchitra Kamble and O.P. Kant ruled that the taxpayer is earning the rental income via commercial malls and provides the same beneath the head profit along with the gains in the business etc, the rental income is created from the commercial units which are not sold and were clutched as stock in trade for the acceptable sales price. AO taxes upon the said rental or lease earnings beneath the head “income from house property”.