House property income prevails over business income where owned flats are temporarily let on licence basis.

Rental income from flats temporarily let on licence basis was held to fall under income from house property, because ownership of the property was the ative factor and the heads of income under the Income-tax Act are mutually exclusive. Temporary letting after an unsuccessful attempt to sell the flats did not convert property income into business income. The assessee's corporate objects were not decisive. Authorities were therefore correct in applying precedent that income derived from property owned by the assessee must be assessed under the specific head for house property, while cases involving different facts, such as absence of ownership or letting of a commercial asset in the ordinary course of business, were inapplicable.

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Issues: Whether rental income earned by the owner of flats temporarily let out on licence basis was assessable as business income or as income from house property under section 22 of the Income-tax Act, 1961.

Analysis: The assessee was the owner of the property and had temporarily let out the flats after failing to sell them. The decisive factor was ownership of the property, not the company's objects. The heads of income under the Income-tax Act are mutually exclusive, and income derived from property owned by the assessee falls under the specific head of income from house property. The authorities correctly relied on precedent holding that where the assessee is the owner, temporary letting does not convert property income into business income. The cases cited by the assessee did not assist it because they turned on different facts, including absence of ownership or letting of a commercial asset in the ordinary course of business.

Conclusion: The rental income was rightly assessed as income from house property and not as business income.

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