| The Tax Publishers2019 TaxPub(DT) 1760 (Mum-Trib) INCOME TAX ACT, 1961
Section 14 Section 22 Section 23(1)/23(i)
Where assessee was in the business of development of real estate projects and letting of property was not the exclusive business of assessee, therefore, rental income earned by the assessee was rightly treated as income under the head 'house property' by CIT(A).
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Head of income - House property income or business income - Rental income earned by assessee-developer of real estate business as well as builders -
Assessee was in the business and developers and during the year under consideration, the assessee earned income from units leased out to certain parties and such leasing was done for long tenures. Assessee had claimed the lease rental income to be income from house property, but the same was rejected by the AO and the Co-ordinate Bench of ITAT in assessee's own case in ITA No. 7119/Mum/13 for assessment year 2010-11 had passed orders in favour of assessee, wherein it was held that the lease rental income be assessed under income from house property. CIT(A) held that rental income earned by the assessee be treated under the head 'house property'. Held: The units provided on tenancy had been made for a tenure ranging between 3 to 9 years, which showed that the intention of the assessee was to earn lease rental income and not to exploit the immovable property. Assessee was in the business of development of real estate projects and letting of property was not the exclusive business of the assessee, therefore, rental income earned by the assessee was rightly treated as income under the head 'House Property' by CIT(A). Moreover, no new facts had been brought on record before Tribunal in order to controvert or rebut the findings so recorded by CIT(A). Therefore, there were no reasons for Tribunal to interfere into or deviate from the findings so recorded by the CIT(A). Hence, the findings so recorded by the CIT(A) were judicious and were well reasoned. Resultantly, these grounds raised by the revenue stood dismissed.
Followed:CIT v. Gundecha Builders ITA No. 347 of 2016 & 4475/Mum/2011 for assessment year 2008-09Relied:Raj Dadarkar & Associates v. Asstt. CIT (2017) 81 Taxmann.com 193 (SC) : 2017 TaxPub(DT) 1173 (SC). Distinguished:Chennai Properties and Investments Ltd. v. CIT (2015) 373 ITR 673 (SC) : 2015 TaxPub(DT) 2180 (SC), CIT v. Sane & Doshi Enterprises (2015) 377 ITR 165 (Bom) : 2015 TaxPub(DT) 2590 (Bom-HC), East India Housing and Land Development Trust Ltd. v. ACIT (1962) 42 ITR 49 (SC) : 1961 TaxPub(DT) 132 (SC) and Pr. CIT v. Quest Investment Advisors (P) Ltd. (2018) 257 Taxman 211 (Bom-HC) : 2018 TaxPub(DT) 4218 (Bom-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13 & 2011-12
IN THE ITAT, MUMBAI BENCH
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