Querry Regarding Rental Income from Paying Guest

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This query is : Resolved

H_S_D (Querist)

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"

I look forward to hearing from you guys.

Thanks & Regards
Haresh Desar

CA Sumat Singhal

CA Sumat Singhal (Expert)

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).

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)

16 April 2011 Hi,

Agreed with Expert, it should be chargeble to tax under the head "Income from House Property"

Thank you,

Regards
CA. Lohith.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons

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