Tests on when rental income is assessable as "house property income" vs. "business profits"

DCIT vs. Magarpatta Township Development & Construction Co (ITAT Pune)

U/s 22, income from the rental of building or land appurtenant thereto is assessable as “Income from house property”. However, where complex and varied services are provided and huge investment in the nature of plant and machinery is made, the income is assessable as “Profits & gains of business”. On facts, the assessee had conducted systematic activity and rendered extensive and specialized services which could only be utilised by the IT/Software/BPOs businesses to be located in the I.T. Park. Such income cannot be treated as forming part of income from house property but is a constitution of organized structure for carrying out business activities to earn profit and accordingly the income is assessable as income from business.