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of <h1>Court classifies building rental income as 'Income from house property' not 'Income from other source'</h1> <h3>K. Bhaskaran Nair Versus Commissioner of Income-tax, Cochin</h3> K. Bhaskaran Nair Versus Commissioner of Income-tax, Cochin - TMI The issue was whether rental receipts for a building let as a furnished lodging house are assessable under the head 'Income from house property' or as 'Income from other source'. The assessee had historically returned the entire receipts as 'Income from other source' and the Assessing Officer had accepted this previously, but for assessment year 1990-91 the AO bifurcated the receipts: rent for the building as 'Income from house property' and rent for furniture as 'Income from other source'. The court held that rental income from the building 'squarely falls under the head 'Income from house property''; past acceptance of a different classification does not permit recharacterisation. Allowing the assessee's approach would permit furnished-accommodation receipts generally to be treated as 'Income from other source', contrary to the scheme of the Income-tax Act which requires classification under the appropriate head. The Tribunal's order was upheld - the question was answered in favour of the revenue and against the assessee.
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