The Kolkata bench of Income Tax Appellate Tribunal (ITAT) in Batram Properties Pvt. Ltd. v. ITO, held that the License Fee received from the tenants is subject to Income Tax under the head “Profit and Gains from Business or Profession” and not under the head “Income from House Property.”
In the instant case, the assessee- Company received license fee from the tenant under a license agreement. The Revenue took a stand that the amount so received is taxable under the head “Income from House Property.” On first appeal, the said order was confirmed. Aggrieved by the order, the Assessee approached the ITAT for relief.
Before the Tribunal, the Revenue contended that the assessee changed its stand what was initially submitted before Assessing Officer.
The bench noticed the decision of the Coordinate Bench of the Tribunal wherein the Coordinate Bench placed reliance in the case of M/s. Konark Furniture Pvt. Ltd. which is sister concern of assessee, on identical facts held that the income in question is to be treated as income from business.
Following the above decision, the bench directed the Assessing Officer to treat the licence fee derived from tenants as income from business.
Subscribe Taxscan Premium to view the Judgment
