Professional ethicsTaxation lawSupreme Court of India

CIT v Smt. P.K. Kochammu Amma

(1980) 125 Income Tax Reports 624 (SC)19801 min read
The case in brief30-second read
Facts
The assessee earned rental income from letting out property. The dispute was whether the income should be assessed under "Income from House Property" or "Income from Other Sources" based on the nature of the activity.
Issue
Under which head of income should rental income from letting out property be assessed: Income from House Property or Profits and Gains of Business?
Held
The Supreme Court held that where the assessee is the owner of a property and lets it out, the income is assessable under the head "Income from House Property" under S.22. The nature of the asset (house property owned by the assessee) determines the head, not the nature of the activity.
Principle
Income from letting out of property is taxable under the head 'Income from House Property' if the property is used for letting; the nature of the asset determines the head of income.
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Facts

  • The assessee earned rental income from letting out property. The dispute was whether the income should be assessed under "Income from House Property" or "Income from Other Sources" based on the nature of the activity.

Issue

  1. Under which head of income should rental income from letting out property be assessed: Income from House Property or Profits and Gains of Business?

Held

  • The Supreme Court held that where the assessee is the owner of a property and lets it out, the income is assessable under the head "Income from House Property" under S.22. The nature of the asset (house property owned by the assessee) determines the head, not the nature of the activity.

Ratio decidendi

The Supreme Court held that where the assessee is the owner of a property and lets it out, the income is assessable under the head "Income from House Property" under S.22. The nature of the asset (house property owned by the assessee) determines the head, not the nature of the activity.

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Citation

CIT v Smt. P.K. Kochammu Amma (1980) 125 Income Tax Reports 624 (SC)

Reported: (1980) 125 Income Tax Reports 624 (SC). This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.