Urgent..............

Page no : 2

CA SANJAY TALWAR (Job) (222 Points)
Replied 27 December 2010

in second question : u want to say that it is financial lease not operating lease ( A to B)

M I RIGHT ?

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sivaram (Asst Mgr-Taxation) (6918 Points)
Replied 27 December 2010

Originally posted by : priyanka***
	than k u sivaram sir but if the assessee has taken the plot on lease from A and constucted Hotel and leased out the same to B and receiving rental income from B and Paying ground rent to A

Primarily if letting out of Building is the Business of Assesse then Rental Income is Business Income else othersources .You can claim the Ground Rent as expense in both cases as it is an allowed expenditure

priyanka*** (IPCC) (120 Points)
Replied 27 December 2010

thanks to all...

CA Ram (CA) (310 Points)
Replied 27 December 2010

it should be taxed under income from other sources.

(Guest)

First of all only land does not satisfy the basic condition to charge it under the head income from house property. It should be attached to and from part of the building to satisfy the basic condition.

Undermentioned answer is based on the assumption that it satisfies the basic condition:

Income from subletting is not taxable under Income from House Property. It is taxable as income from other sources u/s 56.

Exception:

U/s 269 UA(f) if a property is given on lease for a term of not less than 12 years (whether fixed originally or there is a provsion for extension of term and the aggregate period is not less than 12 years), then the person acquiring the right will be the deemed owner of the property.

In your case if the lease is not less than 12 years then under Income from House Property, or

If lease is less than 12 years then Income from other sources.

(To get concept more clear with illustration: Refer V.K. Singhania)

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