House property income prevails over business income when ownership exists, limiting deductions to those allowed under that head

Rental income from property owned by the assessee is assessable under the specific head of income from house property, not as business income, even if the property was earlier treated as stock-in-trade or intended for commercial exploitation. The heads of income are mutually exclusive, so once ownership is established, the tax treatment follows the house property provisions. As a result, only deductions specifically allowable under that head can be claimed, and business expenditure deductions are not available against such income. The disallowance under section 43B was not pressed before the first appellate authority and did not remain for adjudication.

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Issues: Whether the rental income from Scindia House was assessable under the head "Income from house property" or under the head "Income from business", and whether the assessee was entitled to claim business deductions against such income.

Analysis: The property had been owned by the assessee during the relevant year, and the statutory scheme for income from property became applicable once ownership was established. The heads of income are mutually exclusive, so income falling under the specific head of house property cannot be taxed as business income merely because the assessee had earlier treated the property as stock-in-trade or had intended commercial exploitation. The earlier tribunal view for an earlier year did not govern the present year because the material fact of ownership had changed. Consequently, only the deductions allowable under the provisions governing house property income could be claimed, and business expenditure deductions were not available. The disallowance under section 43B was not pressed before the first appellate authority and did not survive for adjudication.

Conclusion: The rental income was correctly assessed as income from house property, and the assessee was not entitled to claim the disputed business deductions against that income.

Ratio Decidendi: Once ownership of the property exists, rental income falls under the specific head of house property and cannot be assessed as business income merely because the property is held as stock-in-trade or intended for commercial use; deductions are confined to those specifically permissible under the house property provisions.

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