2013 (10) TMI 160 - HC - Income Tax

Reassessment u/s 147 - Classification of head of Income Income to be assessed under the head of Income from House property or Income from the business Held that - Keeping in mind the settled legal position that the income is received by the partnership firm and this is the only income of the partnership firm and the said income is coming from letting out of the commercial complex, the assessing authority held the income is to be assessed under the heading income from house property which was erroneously assessed as income from business - The said order has been confirmed by both the Appellate Authorities after dwelling into the statutory provisions as well as law on the point No merit in appeal reassessment confirmed - Decided against the Assessee.

Summary

Issues:
Assessment of rental income under "income from house property" or "business income"

Analysis:
The appellant, a partnership firm, challenged the assessment of rental income from a commercial complex under the heading "income from house property" instead of "business income." The appellant declared the rental income as part of the partnership business income in its return. However, proceedings were initiated under Section 148 due to alleged suppression of income. The assessing authority concluded that the income should be assessed under "income from house property" as it was the only income of the partnership firm derived from letting out the commercial complex. The appellant contended that the income should be assessed as "business income" since the partnership was formed to carry on business. The High Court upheld the lower authorities' findings, stating that the income was correctly assessed under "income from house property." The court emphasized that the partnership firm's income was solely from letting out the commercial complex, supporting the assessment under the relevant category. The court found no substantial legal question to consider, leading to the dismissal of the appeal.