Rental income from sub-lease shall be considered as Business Income since same was business of assessee

Last updated: 13 November 2021

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The Income Tax Appellate Tribunal (ITAT) has ruled that rental income derived from sub-leasing a property should be treated as business income, not income from house property. This decision was made because the assessee was actively involved in the business of real estate development, and the sub-leasing of the property was a direct furtherance of this business activity. The tribunal relied on previous Supreme Court judgments to determine that the income's classification depends on whether it's an exploitation of property or part of a business operation.

Court :
ITAT Chennai

Brief :
In Shri Shanthilal Movji Bhai Thakker v. The Income Tax Officer [ITA No. 2267-2270/Chny/2019 decided on November 3, 2021]Income Tax Appellate Tribunal, Chennai ("ITAT")held that rental income from sub-lease shall be considered as business income as the assesee was engaged in business of real estate development and the property in question was sub-leased in furtherance of their business.

Citation :
ITA No. 2267-2270/Chny/2019 decided on November 3, 2021

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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