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2018 (10) TMI 719 - AT - Income TaxNature of rental income - income from House Property or Business Income - taxability of receipt on transfer of tenancy as income from other sources - taxability of transfer of revisionary rights as long term capital gain - Application of section 50 on transfer of revisionary rights - Held that:- the ‘nature’ of the income which had been rental earning from the house property will not change just because it has been received by the company formed with the object of carrying out business as builder and developer. From the records, we also noticed that the nature of the receipts was rental income even to the previous owners and was taxable accordingly under the head ‘Income from the house property’. - Decided against the assessee. Transfer of tenancy rights - Held that:- since the assessee is in the business of builder and developer, therefore, the amount received on transfer of tenancy rights cannot be taxed as ‘Business income’. The AO had already allowed the related expenses on account of legal & professional fees and the balance amount of ₹ 2,53,888/- was taxed under the head "Income from other sources" - Decided against the assessee. Transfer of revisionary rights - Held that:- the assessee company has assigned by and Large all its rights over the said two flats to those persons, so much so, that at one place it was mentioned that, 'This purchaser would be entitled to sale I transfer and assign the said premises subject to a right of first refusal available to the purchaser as separately recorded'. - the language used in such deed is nothing but to camouflage the real nature of transaction. Even from the records, it is evident that assessee had sold its right, title and interest in the said property, therefore it was rightly taxed under the head ‘capital gain’. - Decided against the assessee.
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