INCOME TAX ACT, 1961

Section 14

Head of income - Income from house property or Business Income - Income earned by assessee from letting out of the building along with other amenities in the industrial park -

Issue arose for consideration as to whether authorities erred in treating the business income derived from complex commercial activities of letting out buildings along with the other amenities in an industrial park partly as income from house property and partly as Income from other sources. Held: In case of CIT v. Velankani Information Systems (P.) Ltd. (2014) 2 ITR-OL 138 KAR : 2014 TaxPub(DT) 4270 (Karn-HC), it was held that if assessee was in the business of taking land, putting up commercial buildings thereon and letting out such buildings with all furniture as his profession or business, then notwithstanding the fact that he had constructed a building and he has also provided other facilities, income from activity does not fall within the heading of 'Income from house property'. Where the intention of assessee was to carry on the business of letting out the commercial property and carrying out complex commercial activity and getting rental income therefrom, then such a rental income falls under the heading of 'Profits and gains of business or profession'. In view of the same, action of Revenue was set aside.

Followed:CIT v. Velankani Information Systems (P.) Ltd. (2014) 2 ITR-OL 138 KAR : 2014 TaxPub(DT) 4270 (Karn-HC).

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2010-11

SUBSCRIBE FOR FULL CONTENT