13 March 2009
One of my client having a partnership firm, taken the land on lease and constructed a warehouses on leaseed land and thus generating the income. My client is also paying rent to the Land owners and deducting the tax. Please help me out under which head of income he is liable?
13 March 2009
Chargeable under Income from House Property as I understand from the following:
"...when a person obtains a piece of land on lease and constructs a building on it, the income from such building will be taxed in his hands as income from house property"
13 March 2009
Income will be taxable as business income because you are not letting the building on hire but you are using it as a warehouse and charging the rent/service charges as per rates decided.
14 March 2009
On a RECONSDIERATION, I too agree that income earned is taxable under income from business category in view of logic putforth by Sri Tilak
16 March 2009
I THINK THE QUESTION IS NOT SPECIFIC. IF WARE HOUSE IS CONSTRUCTED AND LET OUT ON RENT BASED ON AGREEMENT IT IS INCOME FROM HOUSE PROPERTY ONLY. BUT IF WAREHOUSE CONSTRUCTED AND LETTING OUT IS TIME BASED FOR STORAGE OF GOODS THE RENT RECIEVED IS INCOME FROM BUSINESS. ALSO IF LETTING OUT OF WAREHOUSE INCLUDE NOT ONLY THE LETTING OUT OF SPACE BUT IT ALSO INCLUDE LETTING OUT OF VARIOUS UTILITIES LIKE COMMON SPACE, ELECTRICTY ETC THEN ALSO IT IS TO BE TREATED AS BUSINESS INCOME
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