House Property held as Stock in Trade

If the property constitutes Stock-in-Trade of a business or the business of the Assessee is to let out house properties, the Income is to be charged only under the head “Income from House Property”.

Exceptions

Letting out is a supplementary to the main business: If the property is let out with the object of carrying the business of the Assessee in an efficient manner, then Rental Income is taxable as Business Income. Deduction or allowances have to be calculated as relating to Profits/Gains of Business, and not relating to House Property.

Letting out of Building along with other facilities: Income from such Building along with facilities cannot treated as Income from mere Ownership of House Property, and hence Assessable as Business Income.

Special Aspects

Issue Treatment
Real Estate For a Company in Real Estate Business, with the object of buying and developing landed properties, the Income from unsold property let-out is taxable under the head “Income from House Property”.

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