Accounting lease rental on receipt basis

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A Company leases one its building to a Hotel and  receives lease rentals. Whether the said lease rental can be accounted on receipt basis.  Whether the said income can be considered as income from house property.

Replies (2)

Plesae be guided by following points

1) What are the objects of the company: If it includes Leasing of property then it is a business income

2) Whether the property which is leased out is a depreciable asset, in the block of assets if yes then it is a business asset and income is business income

3) the property leased out should be clearly bifurcated from other property used.

Merely you are booking the lease rental on receipt basis do not change nature of the transaction

 

 

 

Also have a look on AS-9


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