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qUERY oN cHARGEBILITY oF iNCOME

Tax queries 1200 views 7 replies

Mr.X, who was deriving income from house property, realized a sum of Rs.2,52,000 on account of display of advertisement hoardings of various concerns on the roof of the building. Can he claim that this amount should be considered under the head Income from house propertyand not Income from other sources, please justify your answer with suitable provisions of the Income-tax Act?

Replies (7)

In my opinion Mr X cannot claim that the above income shall be chargeale under house property head.

This is becoz U/S22 the annual value of a property consisting of any building or land appurtnants thereto of which the assessee is the owner except such portions as he may occupy for the purposes of any business or profession carried on by him shall be chargeable under the house head.   AND

Further that Sec23(1) defines Annual value as

(i) thesum for which the property might reasonably be expected to be let from year to year OR

(ii)where the property  -------------------is let and the actual rent recieved or receivable by the owner is in excess of the reasonable rent the amount so received or receivable     -------------------

         The analysis of the above clarify that LETTING OF HOUSE PROPERTY IS NECESSARY

As the rent for hoarding cannot be said to be a rent for house it cannot be taxed under that head

I agree with Mr. Mishra.

The above case is of "Income from Other Source"

 

THe point to remember is it is actually the roof of the house property that is let out and not the hoarding. Therefore, it is nevertheless House property income

It is taxable under the head income from other sources.

"Income from hoardings on a roof of a building shall be chargeable to tax under the head INCOME FROM OTHER SOURCES" - Mukherjee Estate Pvt Ltd

 

Even though the rent is for roof of the house but it is not for the purpose of Residence

Thank You all.


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