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2017 (6) TMI 390 - AT - Income TaxIncome from self-owned property - legal owner - Profits and Gains of Business or Profession OR Income Form House Property - Held that - Referring to the decision of Hon ble Supreme Court in the case of Raj Dadarkar & Associates (2017 (5) TMI 586 - SUPREME COURT OF INDIA) we allow the claim of the assessee and direct the AO to assessee the rental income situated at MBC Tower TTK road, Chennai as income from house property, and consequential deductions in respect to interest on borrowed capital, building insurance, Municipal Tax and repair maintenance charges is to be allowed. The AO is directed accordingly.
Issues Involved:
1. Assessment of income from self-owned property as business income instead of rental income under the head "Income from House Property." Analysis: Issue 1: Assessment of income from self-owned property as business income The appellant declared income from a self-owned property in Chennai as rental income under the head "Income from House Property." However, the Assessing Officer (AO) assessed this income as profits or gains from business or profession. The CIT(A) confirmed the AO's action, stating that the appellant had bifurcated the income to avoid tax liability. The tribunal noted that the Revenue had previously accepted the income as from house property in earlier years. Citing the Supreme Court's decision in Raj Dadarkar & Associates vs. ACIT, the tribunal ruled in favor of the appellant, directing the AO to assess the rental income as income from house property, allowing deductions for interest, building insurance, Municipal Tax, and repair maintenance charges. Additional Notes: The tribunal also addressed a common issue regarding disallowance under section 14A read with Rule 8D of Income Tax Rules, which the appellant did not press due to the smallness of the disallowance. This issue was dismissed as not pressed, with a clarification that the decision would not serve as a precedent for future challenges. Overall, the tribunal partly allowed all the appeals of the assessee.
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