10 April 2011
Recently while going though "Income from House property", I got a doubt. Its such that: if I am staying in a house ( the only house i have) and I accomodate a paying guest in order to help me meet my expenses, would the rent received be chargeable under the head Income from House Property or Other sources.
I even discussed it with my peers but cannot find a convincing answer. Also, one of them even cited the case Law Manohar Singh v. CIT [1965] 58 ITR 592 (Punj) and said the income should be charged under the head "Income from business and profession"
10 April 2011
Levy is on income and not on property - The levy of tax under section 22 is on the income from the property and not on the property itself. A conjoint reading of sections 2(24), 14, 22 and 23 of the Act also makes it abundantly clear that what is being taxed under section 22 is the ‘deemed income’ of an assessee from the property owned by him. The contrary view taken by the Allahabad High Court in the case of Wheeler Club [1965] 49 ITR 52 is no good law - Chelmsford Club v. CIT [2000] 243 ITR 89 (SC).
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