2025 (7) TMI 1312 - HC - Income Tax

Income from House Property - Disallowance u/s 24 - respondent assessee had rented out its business unit located at Pondicherry and offered income under the head of income Income from House Property - AO considered the income generated from the business unit to be income under the head Business Profession and disallowed the deduction towards municipal tax and standard deduction u/s 24(1) HELD THAT - There are concurrent findings of fact that the respondent assessee let out the factory building on rent which is offered to tax as Income from House Property . We are therefore of the opinion that Tribunal has not committed any error and no substantial question of law arises from the impugned judgment and order passed by the Tribunal.

Summary

The Gujarat High Court, per Justice Bhargav D. Karia, dismissed two Tax Appeals under section 260A of the Income Tax Act, 1961, arising from Assessment Years 2012-13 and 2013-14. The Revenue challenged the Income Tax Appellate Tribunal's (ITAT) deletion of disallowances under section 24 relating to rental income from a factory building. The Assessing Officer had disallowed deductions under section 24(1), treating the income as "Business & Profession" rather than "Income from House Property," despite the assessee's contention that similar disallowance was deleted for AY 2011-12 by the CIT(Appeals). The CIT(Appeals) allowed the appeal, holding that "the Act does not differentiate between the factory building or in other building for the purpose of computation of income under the head 'Income from House Property'" and that a factory building let out is covered under section 22. The ITAT confirmed the CIT(Appeals) order. The High Court found "concurrent findings of fact that the respondent assessee let out the factory building on rent which is offered to tax as 'Income from House Property'" and held that "the Tribunal has not committed any error and no substantial question of law arises." Accordingly, both appeals were dismissed.