ITAT Mumbai Upholds Treatment of Rental Income as House Property Income

The Appellate Tribunal ITAT Mumbai dismissed the department's appeal against an order directing the treatment of rental income as income from house property instead of income from business for the assessment year 2008-09. The Tribunal upheld the decision of the ld CIT(A) based on the precedent set in the assessee's favor for a similar issue in the assessment year 2006-07. The department's appeal was rejected, and the decision was pronounced on 10th August 2012.

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Issues involved: Appeal against order directing treatment of rental income as income from house property instead of income from business.

Summary:
The Appellate Tribunal ITAT Mumbai heard an appeal filed by the department against an order of the ld CIT(A)-23, Mumbai for the assessment year 2008-09. The main issue was the treatment of rental income amounting to Rs. 4,79,28,371. The department contended that the income should be considered as income from business, not from house property, due to the nature of the assessee's business and the intention behind leasing the unsold unit.

During the hearing, the ld A.R. pointed out that a similar issue had been decided in favor of the assessee for the assessment year 2006-07 in a previous order. The Tribunal had dismissed the revenue's appeal in that case as well. The ld D.R. did not contest this argument.

Considering the submissions and the precedent set in the assessee's own case for the assessment year 2006-07, where a similar issue was decided in favor of the assessee, the Tribunal upheld the order of the ld CIT(A) and rejected the department's appeal.

Ultimately, the appeal filed by the department was dismissed by the Tribunal. The decision was pronounced in open court on 10th August 2012.

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