2021 (11) TMI 531 - ITAT CHENNAI - Income Tax

Head Note / Extract:
Correct head of income - Lease income as ‘Income from House Property’ OR 'Business income' - HELD THAT:- As property under consideration was obtained by the assessee on long term lease basis and it was sub-leased to various tenants. The income thus earned was offered as ‘business income’. The main object of sub-leasing was to exploit the property in a business-like manner and earn the rental income therefrom. It is also evident that the assessee and his associated entities had business interest in real estate development. We find that the major source of income for the assessee is rental income. The assessee obtained long-term lease of the property and sub-leased the same in a regular systematic manner with a view to earn rental income from such activities in a business-like manner. The perusal of financial statements would show that the assessee had obtained loans to procure the properties and business investments were mostly in the nature of various properties. Therefore, considering the facts of the case, the income was rightly offered as ‘Business Income’ and the claim of the assessee, in this regard, was to be accepted. We order so. The Ld. AO is directed to recompute the income of the assessee in terms of this order. Resultantly, the appeal stand partly allowed.