2014 (6) TMI 326

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....tivities as its main objectives such as buying, purchasing, selling, leasing, acquiring lands, buildings and developing land, construction of flats, houses and factories, etc. in the year under consideration it had not done any activity other than letting out property. The only source of income is receipt from property given on rent, situated at Diamond Estate, near Maha Auto, Kalina, Santacruz (E), Mumbai. The assessee has no other income. However, the rental income was treated as income from business and debited administrative expenses and depreciation and claimed deduction against rental income. 3. The AO called upon the assessee to explain as to why the income derived from the property should not be treated as income from property. I....

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....d finally concluded that the impugned income is assessable under section 22 of the Act. In this regard he observed as under: - "5. I have considered the issue. As pointed out above, the appellant's main object is to sale property and earn profit. Admittedly, instead of selling, the property has been let out yielding regular rental income. The property is not in occupation of the appellant as its business premises. The rent is received for use of the property of which the appellant is the owner and such rent is therefore chargeable to income tax under the head income from house property u/s. 22 of the Act. It is settled law that income from exploitation of property is chargeable to tax under the head income from house property. It is also....

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....it is a case of leasing of property simplicitor and in such situation, whether it is a commercial property or not, income earned thereon is assessable to tax only under the head 'property income'. He relied upon the decision of the Apex Court in the case of East India Housing and Land Development Trust Ltd. vs. CIT 42 ITR 49, which in turn was referred to by the learned CIT(A). He also submitted that the assessee company has not carried out any other business and the question of claiming deduction of expenditure in the form of conveyance, etc. does not arise and in fact no such specific plea was raised before the tax authorities in that regard. 8. I have carefully considered the rival submissions and perused the record. In the instant ca....