House property income cannot absorb business deductions or depreciation on leased furniture and tenant-broking costs.

Rental receipts assessed as income from house property cannot carry depreciation on furniture and fixtures, because the heads of income are mutually exclusive and Chapter IV-C depreciation does not apply in computing house property income. Where furniture and fixtures are integral to the letting and rent attributable to them is not separately ascertainable, the assessee cannot recharacterise part of the receipts as income from other sources. Brokerage and professional fees paid to secure tenants are likewise not deductible as business expenditure when the letting income falls under the house property head; deductions must be confined to that head's computation provisions.

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Issues: (i) whether depreciation on furniture and fixtures leased along with house property was allowable when the rental income was assessable as income from house property; (ii) whether brokerage and professional fees paid to secure tenants for leased property were allowable as business expenditure when the letting income was assessed under the head income from house property.

Issue (i): whether depreciation on furniture and fixtures leased along with house property was allowable when the rental income was assessable as income from house property.

Analysis: Income from the leased properties was correctly assessable under the head income from house property. The scheme of the Act does not permit depreciation to be claimed under Chapter IV-C while computing house property income. The heads of income are mutually exclusive, and income must be computed under the head in which it properly falls. The claim for treating part of the rent as income from other sources could not succeed because the furniture and fixtures were found to be integral to the letting of the building and the rent relatable to them was not separately ascertainable.

Conclusion: The depreciation claim was disallowed and the assessee's contention was rejected.

Issue (ii): whether brokerage and professional fees paid to secure tenants for leased property were allowable as business expenditure when the letting income was assessed under the head income from house property.

Analysis: The expenditure was incurred wholly for securing tenants for the let property and had no nexus with the construction business. Once the property income was assessable under the specific head of house property, deduction had to be governed by that head's computation provisions. Expenditure relatable to the letting activity could not be claimed under the business head merely because the assessee also carried on construction and development business. The authorities relied on for an integrated business or indivisible venture did not assist on these facts.

Conclusion: The brokerage and professional fees were held not allowable as business expenditure and the Revenue's objection was accepted.

Final Conclusion: The assessee's claim for depreciation failed, and the Revenue succeeded on the disallowance of brokerage and professional fees. The common legal effect is that the rental receipts were to be computed strictly under the house property head, without importing business deductions or depreciation claims.

Ratio Decidendi: Income must be computed under the specific head under which it falls, and deductions or depreciation cannot be imported from another head unless the statute expressly permits it.

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