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HOUSE PROPERTY HELD AS STOCK-IN-TRADE IS OCCUPIED BY OWNER FOR BUSINESS PURPSOES ANNUAL VALUE SHOULD NOT BE TAXABLE- A point of view

HOUSE PROPERTY HELD AS STOCK-IN-TRADE IS OCCUPIED BY OWNER FOR BUSINESS PURPSOES – ANNUAL VALUE SHOULD NOT BE TAXABLE- A point of view - Income Tax - By: - CA DEV KUMAR KOTHARI - Dated:- 8-3-2017 - Related provisions: Section 22, 28, of Income-tax Act, 1961. Income from house property. 22. The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any busi .....

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ened by fiction in the Act. other than such portions of such property: as he may occupy The expression is different from used for business or profession. for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head Income from house property. Exception for property occupied for business or profession: A reading and analysis of section 22, as made above shows that annual value of any property c .....

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rately then there will be double taxation once as income from business or profession and once as income from house property. This also lead to a complex and un-necessary issue that if a building is occupied for a business or profession income from which is not chargeable, then whether annual value of such property will be taxable under head income from house property? For example, if a house property is used for the purpose of business, income of which exempt e.g. agricultural activity in nature .....

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for purpose of business. As per understanding and information of author, in such cases even a property consisting of building and land is part of business assets, used for business purposes, therefore, exemption enjoyed by business is also applicable to such building and land. Therefore, annual value of such property should not be taxable under section 22. Stock-in-trade of property: Income from trading in properties is taxable as income from business. Stock-in-trade of any article or thing and .....

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to time to show to prospective buyers and their brokers and agents. If such a property is let out it will be difficult to treat it as stock-in-trade and it will also be difficult to sell. Because for selling a property one has to show it to prospective buyers and their brokers or other agents. For selling the property held as stock-in-trade or even as investment, idle condition is that the property must be vacant, owner must have control over it for entry and exit and to handover vacant possess .....

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