2023 (1) TMI 37

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....is case, the Assessee during the year under consideration earned its income from renting of property and sale of maintenance services to the tune of Rs. 3.5 crores and Rs. 13.58 lakh respectively. The Assessee was show caused as to why the rental income should not be considered as income from business and profession as per its primary business activity. In reply the Assessee claimed that Assessee company has been offering rent received under "Income from house property" for the last so many years, which has been accepted in the previous assessment years. Therefore, the claim may be allowed. The assessing officer by relying upon the judgment passed in the case of Chennai Properties & Investment Ltd. Vs. CIT (2015) 373 ITR 0673, wherein it wa....

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....e as Income from Business and Profession" and not under 'Income from House Property". The Ld. AR submitted that the appellant company has received rent only from that portion of the building which has not been occupied for the business purpose and was lying vacant. The appellant company has fulfilled all the conditions laid down in section 22 of the Act to treat the rent received as "Income from House Property". Therefore, when the rent received is specifically taxable under the head "Income from House Property" it cannot be taxed under the head "Business Income" 3.3. The objectives as defined in the MOA of the appellant are as follows:- "1. To act as contractors for any individual, Government, Semi-Government, authorities for the con....

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....e object of the company at all. Therefore, the Supreme Court was of the opinion that the character of income which was from the house property had not altered since it was received by the company, formed with the object of developing and setting up properties. 3.6 In the case of Karanpura Development Co. Ltd. the Supreme Court observed that the deciding factor is not the ownership of land or leases but the nature of the activity of the taxpayer and the nature of the operations in relation to them. It was highlighted that the objects of the company must also be kept in view to interpret the activities. 3.7. The Supreme Court, while relying on various decisions of other jurisdictions i.e. Privy Counsel, House of Lords in England and U.S....

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....of the objects as defined in the MOA of the appellant, this ground of appeal is dismissed." 4. Being aggrieved, the Assessee is in appeal before us. 5. At the outset, the learned AR contended that the Assessee since several years has let out the property involved in this case to various tenants who are paying rent to the Assessee, which the Assessee has been offering under the head "income from house property" and such income has all along been assessed under the heard "House Property" only, which is evident from the previous assessment years passed by the different Assessing Officers. Therefore, the rule of consistency is required to be followed. 6. The learned DR did not refute the factual claim of the Assessee, however relied upon th....