Case Law Details
Shanthilal Movji Bhai Thakker Vs ITO (ITAT Chennai)
ITAT held that rental income from sub-lease shall be considered as business income as the assesee was engaged in business of real estate development and the property in question was sub-leased in furtherance of their business.
Shri Shanthilal Movji Bhai Thakker (“the Appellant”) aggrieved by the order (“Impugned Order”) passed by Assessing Officer (“AO”) treating lease rental income earned by the Appellant as income from House Property as against Business Income offered by the Appellant, has preferred this appeal.
The Hon’ble ITAT observed that the Appellant has acquired the property in question by virtue of lease of 27 years i.e. for a long term basis and is sub-leased to various tenants.
Further observed that, the Appellant and his associated entities were in business of real estate development and the property in question was sub-leased in furtherance of their business i.e., to earn the rental income from the tenants, thus such income cannot be treated as income from house property.
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