2008 (6) TMI 627 - HC - Income Tax

Summary

Issues involved: Classification of rental income u/s "Income from house property" or "Income from other source".

Issue 1: Classification of rental income

The question raised in the case was whether the rental income received for the building should be assessed under the head "Income from house property" or as "Income from other source". The petitioner had let out a lodging house charging separate rent for the building and the furniture. While the petitioner had been returning the entire income as income from other sources for several years, the Assessing Officer for the assessment year 1990-91 bifurcated the rent. The rental income from the building was assessed under the head "Income from house property" and the rental income from furniture under the head "Income from other source". The court noted that rental income from the building squarely falls under the head "Income from house property" as per the Income-tax Act. The court emphasized that the petitioner cannot ask for a shift in the classification of income merely because the agreement provides for the collection of rent for the building along with furniture. The court upheld the order of the Tribunal, ruling in favor of the revenue and against the assessee.