Case Law Details
ACIT Vs Ashapura Developers (ITAT Mumbai)
Conclusion: Assessee was in the business of development of real estate projects and letting of property was not the exclusive business of assessee, therefore, the rental income earned by assessee was rightly treated as income under the head ‘House Property’ instead of ‘business income’.
Held: Assessee was in the business of developers and during the year under consideration, 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 AO by holding that the intention of assessee was to exploit the immovable property by way of commercial activity. It was held the units provided on tenancy had been made for a tenure ranging between 3 to 9 years, which showed that the intention of assessee was to earn lease rental income and not to exploit the immovable property. Moreover, assessee was in the business of development of real estate projects and letting of property was not the exclusive business of assessee, therefore, the rental income earned by assessee was rightly treated as income under the head ‘House Property’.
FULL TEXT OF THE ITAT JUDGEMENT
These two appeals filed by the revenue as well as assessee are against the order of Ld. CIT(A) – 44, dated 14.12.16 & 17.03.16 for AY 2012-13 & 2011-12 respectively.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
