Mayank Mishra (Asst. commissioner of Income Tax) (34 Points)
01 October 2011Kindly tell me, if a taxpayer is showing some ammount of income from house property and also showing maintainance of that property as his business (underlying asset is same). Can he claim set up off loss from his business of ' maintaining that property' with the income from house property. or it is simply an example of tax evasion.
thank you very much
ashish gupta
( student)
(1922 Points)
Replied 01 October 2011
I am Sorry but can you please clarify what exactly is the business of maintaining the property, I mean what assessee is doing with that property
Mayank Mishra
(Asst. commissioner of Income Tax)
(34 Points)
Replied 01 October 2011
@ Ashish,
1. Tax payer has a building in which he has 7-8 flats, which he is letting to tenants. Income coming from this has been claimed by him under the head 'income from house property'( Say 100000 Rs.)
2. Tax payer claims to be in a profession of " providing services" (such as cleaning, gardening, providing security and other maintainance things) and has debited some expenses occured on the business in P&L Account (say 200000Rs.)
3. Tax payer is claiming that he has earned some income from the said business (say 3,500).
4. Now, he has income from House Property 100000 and loss from business and profession -196500.
5. He has set up his lossess against the income from house property.
kindly help how to find out the evasion part. Tax payer is showing service tax etc being paid on the said profession
Regards
Preety Parik
(chartered accountant)
(762 Points)
Replied 02 October 2011
1) As per provisions of Sec.70,71 for set off lossess, there is no restriction in set off of business loss against house property income.
2) Your querry is a complex one . When the asset has been exploitated to earn income from house property and incidental expenses incurred on the same on account of repairs and maintenace is claimed at 30 per cent u/s Sec24, then you cannot claim same expenses under buiness income.
3)Receipt realised for maintanceand ...... forms part and parcel for rent received which you have offered to tax under house property. , U cannot claim expenses under business income without having any income under business income.
Rohit Pithisaria
(Proprietor)
(36 Points)
Replied 02 October 2011
I think the rent income derived by assessee is to be shown under the head of Business & Profession. Bec if the assessee shows the rent receipts in the House Property then there is a tax evasion amounting to 30% of standard deduction. The assessee is also maintaing the same building and the expenses incurred on the maintenance is shown under the business head which is not allowable as there is a standard deduction of 30%. So the assessee should show the rent income as his business incoma and claim all exp on maintaing the said propert in the same head.
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