Rental income from commercial property

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 October 2013 assessee (individual) rented his ancestral 5 properties to commercial enterprises. All the properties were shop and in continuous line on a road. Although rented on various dates in various financial years. Assessee is doing some other business and earning business income from there. Declared rental income as income from house property since last 12 years. In this period 143 (3) assessment was done 3 times. This time only show cause received that rental income should be treated as business income on the basis of allahbad high court decision in case of goel builders. plz help what to reply?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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08 October 2013 well, Goel builder was exactly opposite case.

In goel builder, income tax department wanted to tax income as income from house property whereas the assessee offered income as business income.

nevertheless, to counter the goel builder case you need to demonstrate:

1. the property was not acquired for commercial business or that it was acquired for passive investment only

2. generation of revenue is incidental to holding property. But it is not the primary intent or the activity of the assessee.

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