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Tax audit in case of just rental income

CA Deepak Gupta (In Practice) (81 Points)

04 November 2011

A company which has only Rental Income in excess of Rs.60 Lakhs. It shows this income under the head of 'Income from House Property'. Is it liable for Tax Audit?

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7 Replies

Girish (Student) (67 Points)
Replied 04 November 2011

Tax audit is liable only for income from Bussiness or Profession not from House proprety income ( any other Heads of Income).

Sec 44AB comes under the head of Income from Bussiness Or Profession.

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CA Deepak Gupta (In Practice) (81 Points)
Replied 04 November 2011

What does in Section 44AB made you suggest that?

Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
Replied 09 November 2011

The moot issue is if are having income from non operating business substantially more than normal operating income the AO might be inclined to treat the non operating income (here rentals) as buisness income. The need to justify that it does not form part of core income will be a difficult exercise it seems.

Section 44AB also speaks of gross receipts.

I am expecting other members to share their thoughts, please.