Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 1312 - HC - Income TaxTaxability of rental income on properties held as stock-in-trade - assessee is engaged in the business of development of real estate - Only small portion of the number of units constructed by the assessee were given on lease and license basis - income from the property vs business income - allowability of expenditure - HELD THAT:- The Tribunal, having noted the relevant facts, by placed reliance on the decisions of the Gujarat High Court in the case of Neha Builders [2006 (8) TMI 105 - GUJARAT HIGH COURT] and of the Supreme Court in the case of Chennai Properties [2015 (5) TMI 46 - SUPREME COURT] . It is true that income derived from the property would always be termed as 'income' from the property, but if the property is used as 'stock-in-trade', then the said property would become or partake the character of the stock, and any income derived from the stock, would be 'income' from the business, and not income from the property. If the business of the assessee is to construct the property and sell it or to construct and let out the same, then that would be the 'business' and the business stocks, which may include movable and immovable, would be taken to be 'stock-in-trade', and any income derived from such stocks cannot be termed as 'income from property'. Allowability of expenditure - The Assessing Officer had objected to certain expenditure being claimed by the assessee for earning the business income arising out of running of its units. Once, we hold that the first question regarding taxability of rental income is not to be entertained, automatically the second question would fall - Income Tax Appeal of revenue is dismissed.
|