Rental receipts from leased premises taxed as house property income where no substantive commercial services were proved.

Rental receipts from letting out premises are taxable as income from house property where the owner merely exploits the property as landlord and does not carry on a separate business activity. On the facts, the assessee let the premises on a long-term monthly rent basis, retained no effective control over the occupation, and failed to produce reliable evidence of any substantive commercial services that could convert the receipts into business profits. The lease arrangement was treated as a normal landlord-tenant relationship, not a commercial adventure in the nature of trade. The authorities cited by the assessee were distinguished, and the house property head of income was applied.

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Issues: Whether the rental receipts and alleged service charges derived from letting out the premises were assessable as business income or as income from house property.

Analysis: The Tribunal held that the statutory scheme classifies income under distinct heads, and the character of the receipts depends on whether the assessee is carrying on a business activity or merely exploiting property as owner. On the facts, the assessee let out the premises on a long-term monthly rent basis, retained no effective control over the occupation of the property, and produced no reliable material to show that any independent services were actually rendered so as to convert the receipts into business profits. The lease deed and surrounding facts showed a normal landlord-tenant arrangement rather than a commercial adventure in the nature of trade. The authorities relied on by the assessee were distinguished, and the decision treating similar rental receipts as house property income was applied.

Conclusion: The receipts were held taxable under the head income from house property and not as business income, and the assessee's contention failed.

Ratio Decidendi: Where an owner merely lets out property on a long-term rental basis and does not itself render substantive commercial services, the receipts retain the character of income from house property rather than business income.

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