INCOME TAX ACT, 1961

Section 38(2)

Income from business - Repairs and maintenance as regards building partly used for business - -

AO noticed that assessee has let out an area of 100 st.ft. for a period of five months during the concerned year out of total office area of 10,000 sq.ft. and derived rental income of Rs. 57,500. This rental income was offered to tax by the assessee under the head 'income from business'. AO taxed treat said rental income under the head 'income from house property' and granting flat 30% deduction towards repairs denied further deduction on acount of regular repairs and maintenance claimed as deduction under the head 'income from business'.Held: Rental income offered by assessee in the sum of Rs. 57,500 was only in respect of 100 sq.ft of premises let out for five months. Hence, corresponding flat deduction@30% towards repairs under the head 'income from hosue proeprty' was also given only for a period of five months. No deduction for remaining 7 months had been given, in terms of section 38(2). Accordingly, assessee was entitled for proportionate deduction for the remaining period of seven months of these repairs and maintenance in respect of 100 sq.ft. of property.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

INCOME TAX ACT, 1961

Section 92C

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