In Knight Raj Properties P Ltd vs. ITO, the Mumbai ITAT held that that assessee’s receipts such as compensation received from let out of terrace antenna and hall booking should be taxable under the head business Income.
The assessee, in the instant case, engaged in the business of letting premises in which filed its e-return processed under section 143(1) of the Income Tax Act. However, during the proceedings, AO noted that assessee received rental income and the same has been credited in Profit and loss account and also assessee has claimed expenditure of Rs.18,57,572/- against the same. The AO rejected the contention of AO to treat the same as income from house property and to allow standard deduction of 30%.
The Assessing Officer did not accept the contention of the assessee and taxed the income received from terrace antenna and hall booking under the head “Income from Other Sources”.
Aggrieved by the same assessee approached CIT (A) therein first appellate authority rejected the grounds raised by Assessee and uphold the AO’s decision.
Mr K.Gopal, the counsel for the assessee submitted that the Assessee Company’s only source of income is from letting of the properties and the rental income derived from the same and it should be treated as business income.
On counterpart, Revenue relied upon the decision of lower authority.
While perusing the submissions made by the assessee, Shamim Yahya, Accountant Member wherein held that the profit and loss account of assessee’s company that they derive income only from letting premises. The Tribunal pressed the decision of Apex court in the case Rayala Corporation (P) Ltd. vs. ACIT (supra) duly covers the issue in favour of the assessee.
Finally, the bench allowed the appeal of assessee and held that the income derived on letting antenna and hall booking taxable under the head Income from House Property.
Subscribe Taxscan Premium to view the Judgment
