The Bangalore bench of the Income Tax Appellate Tribunal in the case of The Income-tax Officer v. M/s Anjaneya Infrastructure the lease rental income earned by the assessee from warehouse constitutes business income of the assessee for the purpose of computing income tax.
In instant case, the Assessee is a company engaged in the business of letting out of warehouses and derives rental income from such business, filed its return of income to the tune of 26 lakh. Assessee treated the rental income as business receipt and offered the same for taxation of business income. rejecting the claim, the AO treated the rental income as income from house property and raised demand.
Before the Tribunal, the assessee contended that the said amount constitute business income.
Aggrieved by the assessment order Assessee preferred the appeal before Commissioner of Income Tax (Appeals) wherein the authority allowed the appeal of Assessee. The CIT (A) was of the opinion that the lease rental income derived from letting out of Warehouses to be considered as business income.
Revenue being aggrieved by the order of CIT (A) approached the tribunal by relying on the decisions in the case of Indian Warehousing Industries Ltd. and East India Housing & Land Development Trust Ltd., the facts of which are akin to that of the case in question.
The bench including judicial member, Laliet kumar and accountant member, Jason P Boaz heard the contentions and perused the records. The bench also relied on the decision of co-ordinate bench of this Tribunal in Assessee’s own case proclaimed in favour of himself and declared that the warehouses constructed by the assessee are commercial assets and leasing out commercial property constitutes business income under the Income Tax Act.Subscribe Taxscan AdFree to view the Judgment