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2013 (12) TMI 128 - ITAT MUMBAIRenting of immovable property – Business income or Income form property – Held that:- The assessee company has leased out its entire business premises for the use of the holding company - Following Shambhu Investment (P.) Ltd. [2003 (1) TMI 99 - SUPREME Court] - Merely because income is attached to any immovable property cannot be the sole factor for assessment of such income as income from property; what has to be seen is what was the primary object of the assessee while exploiting the property – If main intention is for letting out the property, or any part thereof, the same must be considered as rental income or income from property - In case the main intention is to exploit the immovable property by way of complex commercial activities, it must be held as business income – The assessee has not exploited its business asset for commercial purposes - The shed was never used for its business purpose and immediately after construction, the shed was given to its holding company - Accordingly, for claiming depreciation, the assessee has shown the rental income as business income as there is no other expenses claimed by the assessee in its profit and loss account - The factory shed was constructed by the funds of the holding company and was used by the holding company - The business asset created by the assessee was only for the purpose of holding company and not use of assessee - The holding company was the owner of the shed as the assessee is a hundred percent subsidiary of the holding company – Decided against assessee. Rental income – Held that:- The shed owned by the assessee was a business asset and in case of business asset, provisions of Section 23(1) are not applicable - No notional income can be computed in view of the provision of Section 23(1) – Decided in favour of assessee.
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