Akshat Shah (13 Points)
01 October 2019
Akash Agrawal
(47 Points)
Replied 01 October 2019
Hello Akshat
You have to consider rental income from shop as IFHP instead of categorizing under PGBP income. This is because your main business vertical is Textile and not rental income. Please also verify the same with Memorandum of your Company under object clause. All the best,
Kapadia Pravin
(17259 Points)
Replied 01 October 2019
Show rental income under IFHP. [ Irrespective of your company status be it proprietory Firm Pvt Ltd ]
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 02 October 2019
1. Since your main business is textile and renting income is incidental to the main object of the company, rent received from the shop should be shown under Income from house property.
2. The above clarification was given in a case law Chennai Properties and Investments Vs CIT (2015) where the main object of the company as specified in the Memorandum of Association (MOA) should be considered for charging such income under PGBP or IHP.
3. To add further if your MOA contains renting of property as one of its main objects (along with textile business) then the same should be charged under PGBP and not under IHP.
4. Make sure to review your MOA before taking any decision.
Please correct me if the above solution has an alternative view.
Kapadia Pravin
(17259 Points)
Replied 02 October 2019
CAclubindia
