Law:

Section:

Section 22 of the Income-tax Act, 1961 - Income from house property - Chargeable as - Assessment years 1969-70 to 1971-72 - Whether annual letting value of ground floor of a building belonging to assessee and which is in the occupation of a firm in which assessee is partner, is not includible in income of assessee under section 22 - Held, yes FACTS During the relevant accounting period, the assessee had allowed the firm in which was the managing partner to use the ground floor of the building belonging to him for the purpose of the business of the firm. He had neither let out the said portion, nor collected any rent for the same and, therefore, the assessee had not returned any income from the ground floor. But the assessment was reopened on the ground that the assessee failed to disclose the particulars of income relating to the ground floor. The assessee objected to the reopening on the ground that the annual value relating to the ground floor was not income chargeable to tax as the same was exempt under section 22. But the ITO rejected the assessee's contention. The reassessment was completed including the annual value of the ground floor of the building also as the assessee's income. The AAC and the Tribunal upheld the assessee's contention and deleted the addition. On reference: HELD Under section 22, if the owner occupied the property for the purpose of his business the profits of which are assessable to tax, no tax is payable in respect of that house property. The tax is on the owner and not on the occupant and levied not on actual income but on the annual value as determined under section 23. The charge is not on rent but on the inherent capacity of the property to yield profit. Even if the owner receives no income the charge will be there on the artificial or notional income statutorily fixed. In order to be taxed under section 22 conditions to be satisfied are (a) property should consist of buildings or lands appurtenant thereto; (b) assessee should be the owner; and (c) the property should not be used by the owner for the purpose of any business carried on by him the profits of which are chargeable to income-tax. If the third condition is not…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492