Rental income versus business income

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SHIVA KUMAR (Querist)

24 January 2013 The assessee company is premimarily involved renting of immovable property. I remember reading one of the Karnataka High Court decision holding that such income is income from business. can anyone help me with the caselaw??

Guest

Guest (Expert)

24 January 2013 ASSESSMENT OF RENTAL INCOME FROM IMMOVABLE PROPERTY

No straitjacket formula can be devised to determine conclusively as to under which head income from immovable property should fall; all the relevant factors need to be necessarily looked into to decide the character of income; if the facts show that the assessee is doing a complex commercial activity by exploiting the immovable property, then the income would fall under the head “Profits and gains from business or profession”; if on the other hand, the assessee has simply let out the space and is earning the rental income, it would fall under the head ‘Income from house property’.

I was unable to find the case law, but this is what i found from taxmann's site.

Link : https://www.taxmann.com/datafolder/Flash/flashbn18-5-09_4.htm

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