Case Law Details
Nallamothu Vijaya Lakshmi Vs ITO (ITAT Visakhapatnam)
ITAT Visakhapatnam held that rent received from sub-letting the property is taxable under the head ‘income from other sources’ and not under the head ‘income from house property’.
Facts- It is alleged that without considering the fact that the assessee is not the owner of the property, the Assessing Officer (AO) made addition of Rs.1,75,000/- under the head “income from house property” based on the entries in the Form 26AS.
Aggrieved, the assessee preferred an appeal before the CIT(A). CIT(A) dismissed the appeal saying that the assessee has not filed appeal against intimation u/s 143(1) of Income Tax Act, 1961, but the assessee has filed rectification petition u/s 154 of the Act before the CPC. As per the rectification order u/s 154, CPC has rejected the application of the assessee for rectification of mistake., since, there is no mistake in the proceedings u/s 154. On being aggrieved, the assessee preferred appeal before the Tribunal.
Conclusion- Held that if the assessee is owner and thereby receives any income from house property, it should be taxed under the head “income from house property”. But in the case on hand, the assessee received rent only by sub letting the property, therefore, we are of the view that the assessee has rightly shown the rental income under the head “income from other sources”. We, therefore, direct the AO to delete the addition made under 143(1) intimation. Hence, the grounds raised by the assessee are allowed.
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