In Banzai Estate Pvt Ltd v. DCIT, the Chennai Income Tax Appellate Tribunal (ITAT) held that the Revenue cannot change head of income without any valid reason.
The assessee declared the income from self-owned property situated at MBC Tower TTK road, Chennai as rental income at Rs 5,27,76,383/-. Apart from the above the assessee also declared rental income of Rs 4,24,83,179/- in respect of sub-letting of properties at (a) Chettiar Hall, TTK Road, Chennai (b) Ambature Anna Nagar, Chennai & (c) Creative Enclave, L.C. Road, Chennai, (d) Perungudi, Chennai at Rs. 5,27,76,383/- as profit and gains from business or profession and assessed under the same head. AO rejected the return on ground that the income from self-owned property situated at MBC Tower TTK road, Chennai is assessable under the head Business Income.
Allowing the second appeal filed by the assessee, the bench found that consistently Revenue is accepted the income from this property i.e. MBC Tower TTK road, Chennai as income from house property. But suddenly, in these three assessment years, now before us the Revenue has changed the head of income from income from house property to income from profits or gains from business or profession without any valid reason. Relying on the recent decision in Raj Dadarkar & Associates vs. ACIT, the bench held that in case the provisions of Section 22 are applicable the property is to be assessed as income from house property.
Read the full text of the Order below.
