Section 22 :Taxability of Income from letting out shops in a complex

Income from letting out shops in a complex without any incidental services is taxable as income from house property

[2015] 58 taxmann.com 12 (Delhi - Trib.)

IN THE ITAT DELHI BENCH 'A'

A.B. Hotels Ltd.

v.

Assistant Commissioner of Income-tax, Central Circle -3, New Delhi

Section 22, read with section 28(i), of the Income-tax Act, 1961 - Income from house property - Chargeable as (Business income v. House property income) - Assessment year 2010-11 - Assessee-company constructed a commercial complex consisting of hotel building and shops - During relevant year assessee let out shops to different parties and declared rental income as 'income from house property' - Assessing Officer having drawn parity between renting out space in commercial plaza and in renting out hotel rooms, concluded that rental income was to be taxed as 'business income' - Commissioner (Appeals) confirmed assessment order - Tribunal in assessee's own case in earlier assessment year, held that it was a case of renting simplicitor and services incidental to letting out did not constitute such complex character so as to render it as a business by itself - Tribunal accordingly concluded that physical proximity of hotel and commercial complex did not really matter and rental income was to be taxed as income from house property - Whether in absence of any change in circumstances, following aforesaid of co-ordinate bench of Tribunal, receipt in question was to be taxed as income from house property for assessment year in question as well - Held, yes [Para 5][In favour of assessee]