HP vs PGBP

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2011 Dear Sir,

My client is doing a business of renting his properties which are basically offices or shops. will such rent fall under PGBP fot tax purpose?

Will it matter if its a residential Bunglow given on rent?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 January 2011 HP
Letting of property with furniture - Where from agreement between two parties, it was clear that primary object was to let out portion of property with additional right of using furniture and fixtures and other common facilities, income derived from said property was income from property which should be assessed as such - Shambhu Investment (P.) Ltd. v. CIT [2003] 129 Taxman 70/263 ITR 143 (SC).

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Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2011 thanks

but we dont have the furniture along.

i wanted to ask that can i claim it to be my business so PGBP provisions shall apply?

or just because it is a house property of any sort (Residential or commercial)it shall fall under HP?

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Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 January 2011 No it would be house property income only.

Querist : Anonymous

Querist : Anonymous (Querist)

27 January 2011 but sir generally people file return for PGBP for such case, means if its commercial property like office rented out.

how plz guide me

Aditya Maheshwari

Aditya Maheshwari (Expert)
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27 January 2011 It would be income from house property only.

Income from commercial complexes - Even in the case of commercial complexes, mere letting out the property and deriving income should be assessed only under the head ‘Income from house property’ and not under ‘Income from business’. However, where the lease agreements provided that certain independent services are also covered apart from the letting of premises and a composite rent is received, the authorities should bifurcate the receipts into portion thereof which is attributable to the provision of such services and assess them under ‘Income from business’ or ‘Income from other sources’. The remaining portion will be taxable under ‘Income from house property’ - A.R. Complex v. ITO [2008] 167 Taxman 46 (Mad.).

Guest

Guest (Expert)

27 January 2011 Agree with Mr. Aditya