property letout -nature of income in the hands of the builder firm.

[sai prasad]

A firm doing buisness in construction of  residential and commercial blocks sold away residential block and the commercial complex is ready. Portion of it was sold. The first and second floor of the complex is let out to banks. The asset is shown as stock-in-trade in the books. The remaining floors are under completion. What is the nature of the rental income in its hands. If it is Property income, there would not be any deduction towards interest and remuneration to partners. Is it income from business? In case the firm keeps these floors to get regular income , what would be the nature of income? Please give your valuable opinion

[nikhileshbegani]

Income from Business. Pls. refer the following decisions :
1) CIT Vs. Neha Builders (P) Ltd. 296 ITR 661 (Guj.HC)
2) CIT Vs. Goel Builders 45 DTR 318 (All.HC)