Law:

Section:

Section 22 of the Income-tax Act, 1961 - Income from house property - Chargeable as - Whether a statutory burden is cast on revenue authorities to statisfy as to whether building or land in question is owned by assessee and whether there is any exploitation of property by its owner by giving it away for rent, before assessing such rental income as income from house property - Held, yes FACTS The assessee requested for assessing the rental income received from its sister concerns under the head 'Profits and gains of business' and for depreciation thereto. However, the Assessing Officer assessed the same under the head 'Income from house property'. On appeal, the Commissioner (Appeals) directed the Assessing Officer to assess the income under the head 'Profits and gains of business' which was also upheld by the Tribunal. On appeal: HELD It is a settled position in law that whether a particular letting is business has to be decided in the circumstances of each case and each case has to be looked at from a businessman's point of view to find out whether the letting was the doing of business or the exploitation of his property by an owner. A thing is not by its very nature a commercial asset. A commercial asset is only an asset used in a business and nothing else, and business may be carried on with practically all things. Therefore, it is not possible to say that a particular activity is business because it is concerned with an asset with which trade is commonly carried on. [Para 12] A statutory burden is, therefore, cast on the revenue authorities, that they should satisfy as to whether the building or land in question is owned by the assessee, before invoking section 22 for the purpose of assessing the rental income of the property of the assessee as income from house property. That apart, the revenue authorities are also expected to go into the question as to whether there is any exploitation of the property by its owner by giving it away for rent, before assessing such rental income as income from house property. [Para 13] From a perusal of the assessment order as well as the order of the appellate authorities, it was clear that there was no finding that the…

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