Rental income from letting of godowns of a company

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Vijender Bisht (Querist)

25 April 2015 A Public Limited Company Let out its godown to another limited company(Subsidiary Co.). & receive rent of Rs.40 Lacs. For computation of income, this rental income should include in House property income or PGBP?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

25 April 2015 If the income has been earned by mere exploiting of the ownership of the property, then the same is assessable as income from house property. However exception to this rule is that if the immovable property has been temporarily let out with the primary object to exploit the same by way of complex commercial activity then the income is assessable as income from business.

Citation: Supreme Court’s judgment in the case of CIT vs. Shambhu Investments Ltd. (263 ITR 143)

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

25 April 2015 Also check out links given below fo details:

https://www.taxmann.com/datafolder/Flash/Flashbn2-12-09_5.htm

https://www.taxmann.com/datafolder/Flash/flashjud300109_2.htm

https://taxguru.in/income-tax-case-laws/main-intention-exploit-immovable-property-complex-commercial-activities-event-held-business-income.html

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