2016 (8) TMI 522 - SUPREME COURT

Nature of Rental income - to be taxed under the head “Income from House Property” or “Profit and gains of business or profession” - Held that:- It is an admitted fact in the instant case that the assessee company has only one business and that is of leasing its property and earning rent therefrom. Thus, even on the factual aspect, we do not find any substance in what has been submitted by the learned counsel appearing for the Revenue.

In view of the law laid down by this Court in the case of Chennai Properties (2015 (5) TMI 46 - SUPREME COURT) and looking at the facts of these appeals, in our opinion, the High court was not correct while deciding that the income of the assessee should be treated as Income from House Property. - The business of the company is to lease its property and to earn rent and therefore, the income so earned should be treated as its business income.

We, therefore, set aside the impugned judgments and allow these appeals with no order as to costs. We direct that the income of the assessee shall be subject to tax under the head “Profits and gains of business or profession”.