Renting by letting out of property whether business income or house property

Facts :

Assessee took a loan and bought a property in Bangalore and let out the same. Initially rental income was claimed during the 4 asst. years from 2011-2015 as income from house property, subsequently assessee took a stand that the letting out was business income and accordingly various interest, carry forward of losses etc. were all claimed. Logic for the same was besides the Bangalore property assessee also had invested in a property on which only advance was paid. By paying the advance the assessee had commenced businesses thus eligible for all expenses, offset off losses etc. The CIT(A) refused to concur with the views of the assessee. Aggrieved assessee went in higher appeal to ITAT -

Held against the assessee that the income from letting was income from house property as the assessee could not prove from the Memorandum of Association as to where the objects of the Company covered letting out as part of its business. Since the paying of advance only commenced business with no business income at all no set off or interest or expense etc. were also allowable. Only interest to the extent it was used for the let out property was allowed under Section 24(b).

Distinguished :Chennai Properties and Investments Ltd vs. CIT (2015) 373 ITR 673 (SC) : 2015 TaxPub(DT) 2180 (SC)

Case: Highend Properties (P) Ltd. v. Dy. CIT 2023 TaxPub(DT) 2110 (Hyd-Trib)