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2013 (12) TMI 128 - AT - Income TaxRenting of immovable property Business income or Income form property Held that:- The assessee company has leased out its entire business premises for the use of the holding company - Following Shambhu Investment (P.) Ltd. [2003 (1) TMI 99 - SUPREME Court] - Merely because income is attached to any immovable property cannot be the sole factor for assessment of such income as income from property; what has to be seen is what was the primary object of the assessee while exploiting the property If main intention is for letting out the property, or any part thereof, the same must be considered as rental income or income from property - In case the main intention is to exploit the immovable property by way of complex commercial activities, it must be held as business income The assessee has not exploited its business asset for commercial purposes - The shed was never used for its business purpose and immediately after construction, the shed was given to its holding company - Accordingly, for claiming depreciation, the assessee has shown the rental income as business income as there is no other expenses claimed by the assessee in its profit and loss account - The factory shed was constructed by the funds of the holding company and was used by the holding company - The business asset created by the assessee was only for the purpose of holding company and not use of assessee - The holding company was the owner of the shed as the assessee is a hundred percent subsidiary of the holding company Decided against assessee. Rental income Held that:- The shed owned by the assessee was a business asset and in case of business asset, provisions of Section 23(1) are not applicable - No notional income can be computed in view of the provision of Section 23(1) Decided in favour of assessee.
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