Case Note & Summary
The present appeal was filed by the Revenue under Section 260-A of the Income Tax Act, 1961, against the order dated 27.02.2015 passed by the Income Tax Appellate Tribunal (ITAT), 'A' Bench, Bangalore, in ITA No.1440/Bang/2013 for the Assessment Year 2008-2009. The Tribunal had dismissed the Revenue's appeal and deleted the addition made by the assessing officer in respect of rental income from Koramangala Property No.408. The Revenue contended that the assessing officer had estimated the rental income at a higher rate and the Tribunal erred in deleting the addition. The court considered the re-framed question of law whether the Tribunal was justified in deleting the addition without appreciating the fact that the assessing officer had estimated the rental income at a higher rate. The court held that the rental income from property held as stock-in-trade is assessable under 'Income from House Property' under Section 22 of the Income Tax Act, 1961, and not under 'Business Income'. The court found no substantial question of law arising from the Tribunal's order and dismissed the appeal, upholding the Tribunal's decision.
Headnote
A) Income Tax - Rental Income - Assessment - Section 22, Income Tax Act, 1961 - The issue was whether rental income from a property held as stock-in-trade should be assessed under 'Income from House Property' or 'Business Income'. The court held that rental income from property held as stock-in-trade is assessable under 'Income from House Property' under Section 22 of the Income Tax Act, 1961, and not under 'Business Income'. The Tribunal's deletion of the addition was upheld. (Paras 1-3)
Issue of Consideration
Whether the Tribunal was justified in deleting the addition made by the assessing authority in respect of rental income of Koramangala Property No.408 without appreciating the fact that the assessing officer had estimated the rental income at a higher rate.
Final Decision
Appeal dismissed. No substantial question of law arises. Tribunal's order upheld.
Law Points
- Rental income from property held as stock-in-trade is assessable under 'Income from House Property' under Section 22 of the Income Tax Act
- 1961
- not under 'Business Income'.
