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Rent from commercial property

kalaimani (audit assistant) (79 Points)

06 June 2012

Rent received from Commercial Building is chargeable under the head House Property ?

If it is the main source of income i.e., he doing it as a businesss can we chargeable under the head business or profession?

Please clarify this

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7 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 06 June 2012

Even if the busines is of letting out of house properties on rent, the income would still be chargeable under the head Income from house Property.

CA PARAS BAFNA (Practising CA ) (33423 Points)
Replied 06 June 2012

Since Rental income is arising from the House Property only, and a special head of Income has been prescribed for the HP Income, you have to show it under the head IFHP.

Neha sharma (-) (1257 Points)
Replied 06 June 2012

Income from Commercial Property is to be shown under head Income from House Property only and not under any other head of Income

sajid (Auditor) (214 Points)
Replied 07 June 2012

No, you can not show the income from rent, under the Head of Business Income.

kalaimani (audit assistant) (79 Points)
Replied 07 June 2012

Thanks All of U

varun (a) (25 Points)
Replied 07 June 2012

Where the investment made by the assessee while constructing the commercial complex seems to be abusiness investment, the rental income earned from the building as a natural consequence shall be business income.

CASE LAWS DETAILS

DECIDED BY: HIGH COURT OF ALLAHABAD, IN THE CASE OF: CIT v. Goel Builders APPEAL NO: ITA No. 127 of 2005, DECIDED ON May 24, 2010

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varun (a) (25 Points)
Replied 07 June 2012

Where a building is constructed as a commercial complex under a planned business activity, with all facilities, the income therefrom shall be assessable as business income and not as income from house property - CIT vs Goel Builders [2011] 331 ITR 344