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2022 (4) TMI 396 - HC - Income TaxCharacterization of income - rental income earned by the assessee as income from the business - whether the rental income is income from business or income from house property? - HELD THAT:- The arrangement is made or entered into more to adjust the outstanding liability of the assessee to KSBC. The clauses in the agreement refer to an owner of property transferring lease-hold rights. As rightly held by the appellate authority, the additional advantage or reduction in overheads is not the deciding factor for meriting a claim as business income. The crux of the matter is whether the object of the transaction, whether the assessee continues to do business or not, chances of revival, nature of asset in which third-party enjoyment right is created for consideration are relevant and essential. Looking at the circumstance stated by the assessee, it is clear that the assessee was doing the same business before the subject Assessment Year and continued to do the same business of manufacture of IMFL. The assessee has let several portions of available building on lease to different individuals/entities. The parting of possession of godown, particularly in the circumstances of the case, is more as an owner of a business asset, but not for exploiting a commercial asset. Assessing Officer, the Appellate Authority, and the Tribunal have considered the case in the right perspective and disallowed the claim of rental income as business income. We hold that the Tribunal and the authorities have rendered available findings of fact on the assessee’s claim of rental income as business income and rejected the claim. No ground warranting interference is made out. The question is answered against the assessee and in favour of the Revenue.
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