HP - Maintenance Charges received - Income from Othersources

Hi

One of my client has a property (which is let out as a guest house). The client pays maintenance charges on a monthly basis.

1. Can we show the amount received from tenant as income from other sources and set of the maintenance charges paid against it? and tax only the rent received portion as income from HP. 

2. If the house was kept vacant for some time, can we show loss from other sources - which is excess of maintenance paid over receipt of maintenance charges?

If you can explain whether the approach is correct and if so, any case laws to support (if any).

Thanks

Replies (1)

Dear Sir,

Income will be assessed as Business Income & maintenance charges can be claimed as deduction.

Income from paying guest establishment is business income - Where owner of property is running paying guest establishment, income from property is assessable as business income - Manohar Singh v. CIT [1965] 58 ITR 592 (Punj.).

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