Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2008 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (4) TMI 532 - AT - Income TaxLet out Immovable property - Income from house property OR business income? - Receipt being rent of "Infrastructure Facilities" installed in the property Let Out - Property let out to its group companies on fixed monthly rent basis - HELD THAT:- The activity of letting out the immovable property is always assessable under the head ‘Income from house property’ even though the object of the assessee is to carry on the business of real estate inasmuch as separate and specific head is provided for computing such income. The word ‘business’ connotes some real, substantial and systematic or organised course of activity or conduct with a set purpose as held by the Hon’ble Supreme Court in the case of Narain Swadeshi Wvg. Mills v. CEPT[1954 (10) TMI 11 - SUPREME COURT]. If this test is satisfied then income earned would be computed as business income. In the present case, the assessee has failed to prove that any business activity was carried on by the assessee. Mere statement of the assessee that it was running a business centre is not enough. No facility or services were provided by the assessee. It is mere case of letting out of furnished accommodation on long-term basis. In case of business centre, the purpose is to provide space to business people on short-term basis for holding conferences, exhibitions, etc., which is missing in the present case. The case of the assessee is akin to the case before the Apex Court in the case of Shambhu Investment (P.) Ltd. [2003 (1) TMI 99 - SC ORDER] and, therefore, income from letting out was rightly assessed as ‘income from house property’. The order of the CIT(A) is, therefore, upheld. In the result, the appeal is dismissed.
|