Veerprabhu Auto Pvt. Ltd. Vs ACIT (ITAT Kolkata)
Rental Income Taxed as House Property; Jurisdiction Objection Rejected — ITAT Kolkata Dismisses Assessee’s Appeal
The Kolkata Bench of the ITAT dismissed the appeal of Veerprabhu Auto Pvt. Ltd. for AY 2016-17, upholding the assessment of rental income as “Income from House Property” instead of “Business Income” and rejecting the belated jurisdictional challenge.
Although the delay of 24 days in filing the appeal was condoned, the Tribunal noted that the assessee’s main business, as per its Memorandum of Association, was automobile-related and not property letting. Applying the principles laid down in Chennai Properties and Sultan Brothers, the Tribunal held that letting out of property was not the main business activity and therefore rental receipts were rightly assessed under the head “Income from House Property.” Consequently, only statutory deductions under section 24 were allowable and claims for depreciation, repairs, and legal expenses were correctly disallowed.
On the additional ground challenging jurisdiction based on CBDT Instruction No. 1/2011, the Tribunal held that the objection was time-barred under section 124 and further observed that in search and centralized cases, administrative instructions do not invalidate jurisdiction. The decision in Abhisar Buildwell was held inapplicable as the assessment year was an abated year.
Accordingly, the order of the CIT(A) was confirmed and the appeal was dismissed in entirety.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
