CA Saurabh Chokhra
Rental Income from business of leasing out house properties taxable as business income and not income from House property
Brief of the case:
- The Hon’ble Supreme court in the above cited case held that if the assessee is engaged in the business of leasing out house properties then the rental income shall be taxable as business income and not income from house property.
- Reliance was placed on the decision of Supreme Court in the case of Chennai Properties and Investments Ltd. v. Commissioner of Income Tax [2015] 373 ITR 673 (SC)
Facts of the case:
- The assessee is a private limited company is having house properties which has been rented and the assessee is receiving income from the said property by way of rent. The dispute arised regarding the head of income in which the rental income to be taxed.
- As per the assessee, it is in business of renting its properties and is receiving rent as its business income, the said income should be taxed under the Head “Profits and gains of business or profession” whereas the case of the Revenue is that as the income is arising from House Property, the said income must be taxed under the head “Income from House Property”.
- High court held that the rental income to be taxable under the head “Income from House Property”. Aggrieved assessee is in appeal before the Hon’ble Supreme Court.
Held by the Hon’ble Supreme Court:
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