Law:

Section:

Section 28(i) of the Income-tax Act 1961 - Business income - Chargeable as Where assessee was engaged in letting out rooms in lodging house, income received by it from letting out a building to a bank on long-term lease would be assessed as income from property and not as income from business [In favour of revenue] The assessee was engaged in letting out rooms in the lodging house. It rented out a building to a bank on long-term lease. The income from the lodging building was being treated as business income. The assessee contended that rental income from the building rented out to bank also should be treated as business income. The revenue authorities held that the income from renting out building to bank was to be treated as income from property. Held that letting out building on long-term lease is not a business activity at all. While lodging was business, letting out building to the bank could not be treated as business. It was to be assessed as income from property. CASES REFERRED TO Seapearl Enterprises v. Dy. CIT [2007] 294 ITR 374 (Ker.) (para 1) and Parkash Agro Industries v. Dy. CIT [2009]316 ITR 149 (Punj. & Har.) (para 1). Anil D. Nair and Smt. Nivedita A. Kamath for the Appellant. P.K.R. Menon and Jose Joseph for the Respondent. JUDGMENT C.N. Ramachandran Nair, J. - Only two issues arise from the three questions raised in the connected appeals filed by the assessee. The first issue is whether the income received from building under the name "Konny Building" is business income or not. Counsel contended that the assessee is engaged in letting out rooms in the…

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