Sub lease rent

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

24 June 2011 My client has purchased a Leased property which consists of plot & shed on it. He has now subleased it & under the terms of Lease agreement he has to spend Rs.15 lacs( maximum) as expenses for repair of the said shed.Assese is a Private Ltd. Co. & the main object does not have leasing as the main object.
Question arises;-
1;- How to treat the said Income i.e House Property head or Business Income.
2;- If it is House Property Income deduction allowable will be 30% only or both as this is the part of Lease agreement.
3;- If it is treated as business Income, Expenses will be deducted 100%.
4;- Under such case what type of tax planning he should be advised.
Please reply.

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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26 June 2011 Income from sublease will be treated as Business Income

ITAT, BANGALORE BENCH `B’, In The case of: Prestige Estate Projects Pvt. Ltd. v. DCIT, Appeal No.: ITA No. 218/Bang/09.

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