Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business income - Chargeable as - Assessment year 1987-88 - Tribunal following its own order rendered in assessee's own case for assessment year 1985-86 held that income derived from property should be assessed under head 'Business' - Revenue's case was that order of Tribunal for the assessment year 1985-86 along with other years was subject-matter of reference in Tax Case and Madras High Court in CIT v. Chennai Properties & Investments Ltd. [2004] 266 ITR 685/ 136 Taxman 202 , held that income derived from letting out property should be assessed as income from "house property" and not under head 'Business' - Whether Tribunal was not correct in holding that rental income from property should be assessed under head 'Business' - Held, yes CASES REVIEW CIT v. Chennai Properties & Investments Ltd. [2004] 266 ITR 685 (Mad.) followed and relied upon. CASE REFERRED TO CIT v. Chennai Properties & Investments Ltd. [2004] 266 ITR 685/ 136 Taxman 202 (Mad.) [Para 3]. Mrs. Pushya Sitaraman for the Applicant. P.P.S. Janardhanaraja for the Respondent. JUDGMENT N.V. Balasubramanian, J. - The Income-tax Appellate Tribunal has stated a case and referred the following question of law for our consideration under section 256(1) of the Income-tax Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the rent receipts derived by the assessee-company from letting out of properties should be assessed under the head 'Business' thereby allowing the expenses incurred for letting out of properties as business expenditure ?" 2. The assessment year involved in this case is 1987-88. The assessee is a company deriving, inter alia, rental income from the properties. In the assessment proceedings for the said assessment year, the rental income derived by the assessee-company was assessed under the head "House property", which was objected to by the assessee. The assessee carried the matter in appeal before the Commissioner of Income-tax (Appeals), and the said authority allowed the appeal holding that the income from the property should be assessed under the head…

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