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The judgment involves determining whether the income derived from letting out premises should be classified as business income or income from house property. Issue 1 - Classification of Income: The assessee, engaged in the development of computer software, declared rental income as part of business income and claimed depreciation on the property. The assessing authority categorized the income as from 'house property' and disallowed depreciation. The Commissioner of Income-tax (Appeals) considered it as income from the exploitation of commercial assets and allowed depreciation. The Tribunal found the income to be from 'house property' but disagreed with treating it all as business income, remanding the matter for proper assessment. Issue 2 - Nature of Business Income: The appellant argued that the leased fully furnished office space was part of their commercial asset, thus constituting business income. The Lease Deed detailed the premises leased for business use, with agreed rent and terms. The Tribunal concluded that the income was from house property, not business, as the assessee's primary business was software development, not property rental. Conclusion: The High Court upheld the Tribunal's decision, stating that the income derived from renting out the premises was rightly classified as 'income from house property.' The Court emphasized that the assessee's main business was software development, not property rental, and therefore, the income should be treated as such. The Tribunal's decision to remand the matter for proper assessment of deductions related to house property income was deemed justified, with no substantial legal question arising for consideration. The appeal was dismissed.
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