Classification of rental income as business or house property income held business where property built for commercial letting.

Classification of rental receipts focuses on whether income is business income or income from house property; each assessment year is adjudicated independently, so prior treatment does not operate as res judicata or absolute estoppel for subsequent years, although Revenue must not change views mechanically and may depart from prior treatment only for justifiable reasons such as change of circumstances, non-consideration of material, or jurisdictional failure. Where property was constructed exclusively for commercial letting as part of trade, the receipts qualify as business income rather than income from house property.

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Issues: Whether the rental income derived from the property was chargeable under the head 'Profits and gains of business or profession' or under the head 'Income from house property'.

Analysis: The analysis applies sections 22 to 27 (defining income from house property and 'owner of house property') together with section 28 and related provisions governing profits and gains of business or profession. The material facts show the land and building were acquired and constructed for commercial purposes and the premises were let out on a continuous commercial basis while a portion was used for business. Earlier assessments and appellate orders consistently treated the receipts as business income and the Tribunal recorded that no substantial new material justified departure from that position. While res judicata strictly does not apply between assessment years, consistency in treatment is a relevant factor and departure is permissible only on justifiable grounds such as change of circumstances or newly available material. Applying these legal principles to the recorded facts, the receipts arise from exploitation of a commercial asset and form part of business activity rather than being income from residential house property.

Conclusion: The rental income from the property is assessable under the head 'Profits and gains of business or profession'.

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