Income from Letting out a Commercial Complex is Business Income: Patna HC [Read Judgment]

Recently, the division bench of the Patna High Court held that the income earned by the assessee from letting out a commercial complex must be treated as his business income. The Court, based on several judicial decisions, expressed a view that the said income constitutes “income from house property.”

In the instant case, the assessee-Firm had constructed a commercial complex and had derived rental income from the same. The assessee furnished the income tax returns for the relevant assessment year by showing the same as its “business income.”. However, the assessing authority had rejected the returns and disallowed the assessee’s claim by pointing out that the said income is liable to be treated as its “income from house property.”

Before the High Court, the appellant-assessee relied upon the decisions in Chennai Properties & Investment Ltd and rayala Corporations Pvt Ltd, and submitted that in case an assessee drawing rental income from a building constructed for earning income, is the business income of the assessee.

Accepting the contention of the assessee in the light of the above precedents, the Court emphasized that the income from letting out the commercial complex is the business income of the assessee.

Read the full text of the Judgment below.