Revenue from operation of hotel/resort taxable under the head “Business income”

Coronet Hotel Services & Suppliers Pvt. Ltd. Vs DCIT (ITAT Delhi)

ITAT Delhi held that revenue receipt generated from the operation of “Hotel/ Resort” is taxable under the head “Business income” and not under “House Property” as fixed amount was not received in fact revenue was generated on fluctuation basis.

Facts- The Assessee declared the revenue receipts generated from operations of “Hotel/Resort” as “rental income”. Subsequently the Assessee by revising it return of income offered the ‘revenue receipts’ from the operation of “Hotel” under the head “Business Income”.

AO show-caused the Assessee, as to why the receipts from M/s Four Seasons Hospitality Pvt. Ltd. which has been declared as “Income from Business & Profession” in its revised return, should not be assessed under the head “Income from House Property” as per original return.

AO consequently treated the income under the head “House Property” instead of “Income from Business & Profession”. Commissioner affirmed the action of AO. Being aggrieved, the present appeal is filed.

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