03 July 2013
One of my Client is a Partnership Firm with the nature of business as :
"Aquiring, Purchasing, Building, Constructing, Erecting, Maintaining, Letting Out, Leasing, Renting, Selling, Conveying and similar thereof Flats, HOuses, Buildings, Townships, Commercial Complexes, Malls, Multiplexes, Shops, Godowns, Building material suppliers &/or such other business or businesses ...".
In this case my client has purchased only one shop in F.Y. 2010-11. The client has rented this property in F.Y. 2012-13. This is the only income of the client. The partners have introduced certain capital to acquire this shop.
It is provided in PF Deed to allow interest on Partner's Capital not exceeding @12% p.a. Also it is provided to pay remuneration as per IT Act, 1961 in PSR (1:1).
Now, the rental income should be treated as income from house property or income from business or profession considering the above facts.
If it is treated as income from house property then what about claiming expenses of interest on partners' capital & remuneration to working partners. Also what will be the treatment of nature of asset (Long term or Short term Capital Asset or Stock-in-trade) considering the above facts.
If it is treated as income from business or profession then what will be the treatment of nature of asset (Long term or Short term Capital Asset or Stock-in-trade) considering the above facts.
Please solve this issue with supporting case laws.
04 July 2013
ITS UR BUSINESS TO RENT OUT HENCE INCOME WILL B TREATED AS INCOME FM BUSINESS. PARTERS SALARY ETC WILL BE ALLOWED. ASSET WILL BE STOCK-IN-TRADE. CA MANOJ GUPTA JODHPUR 09828510543
CAclubindia
