The Mumbai bench of Income Tax Appellate Tribunal has recently held that income from house property from abroad is not taxable.
The assessee in the instant case was being a public sector bank, engaged in banking business and other related financial activities and raised an appeal with regard to exclusion of income from house property at Kenya.
During the assessment period the Assessing Officer found that the assessee had credited a huge amount as rent received and he considered the said amount while computing the income from house property in the original return. out of Rs 61.64 lakhs declared a lower income of Rs.9.09 lakhs from the house property. The AO has held that total rent received during the year and amount received from foreign branches were included, that the lower income offered in the revised return was going to the exclusion of the same from the Indian income u/s.90 of the Act. And he concluded that exclusion of income cannot be allowed and income of the assessee from house property had to be taxed at the figure shown in the original return.
The bench comprising of Judicial Member Sandeep Gosain and Accountant Member Rajendra has observed that the assessee has excluded the income from house property which was covered by the article 6. The DTAA contains two articles like article 6 is deals with house property income and article 7 is covered with business income.in this case the AO and FAA treated the both business income and house property income as one source of income for tax purpose. According to the article 6 ,income from house property in Kenya is not taxable in India.
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