if one house property is let out to the company by the another company then income will charge in which head ?
company is doing letting out business
or not ?
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House Property
Replies (5)
Either HP or PGBP(nature of operations is important )..if its main activities are into letting out then it would be considered as Business income in any other case HP
PGBP BECOZ COMPANY IS AN ARTIFICIAL PERSON
AND IT CAN'T DO OTHER PRATICES OTHER THAN PGBP EXCEPT IN CERTAIN CASES
AND IT CAN'T DO OTHER PRATICES OTHER THAN PGBP EXCEPT IN CERTAIN CASES
PGBP in case if it is its main business.
Rent in question to be treated as business income only when company has as it's object of earning rental income by letting of property as per Memorandum Of Association of the company.
In the absence of such an object in MOA , rental income will be taxable under the head of house property.
In the absence of such an object in MOA , rental income will be taxable under the head of house property.
Income of letting out of house property by a company is chargeable under PGBP the below ruling by supreme court -
In the case of M/s Chennai Properties & Investments Limited, held that if letting out of properties was the business of the taxpayer, then its income would be chargeable to tax under the head ‘profits and gains of business or profession’ as opposed to ‘income from house property’.
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