In a recent decision, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) granted Piramal Enterprises relief by ruling that rental income from RP House should be treated as income from house property, not income from other sources, contrary to the CIT(A)’s decision.
The CIT(A) erred in upholding the Assessing Officer’s treatment of the rental income from RP House as “Income from Other Sources” instead of “Income from House Property,” arguing that the appellant is not the property owner.
Despite lower revenue authorities treating the rental income as income from other sources, the CIT(A) directed the AO to classify rental income from the Center Point as income from another house property and allow statutory deduction under Section 24(a) of the Income Tax Act.
Mr. Priyank Gala argued that the appellant remains the owner of part premises of RP House, warranting assessment under the head “Income from House Property.”
The bench determined that the appellant retained ownership of RP House for four years, therefore rental income should be assessed under “Income from House Property,” entitling the appellant to a statutory deduction of 30% under Section 24(a) of the Income Tax Act, 1961.
Consequently, ITAT instructed the AO to assess the rental income under “Income from House Property” and allow deduction under Section 24(a), ruling in favor of the assessee.
The coordinated bench of the Tribunal, comprising S. Rifafur Rahman (Accountant Member) and Kuldip Singh (Judicial Member), accordingly following the order passed by the co-ordinate Bench of the Tribunal on the identical issue AO is directed to assess the rental income of let out portion of RP house as income from house property. This ground was decided in favour of the assessee.
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