JIGNESH KANJIBHAI SHAH GALA,PUNE vs. DCIT CIRCLE-12, PUNE

ITA 3035/PUN/2025Status: DisposedITAT Pune15 June 2026AY 2018-1911 pages
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What were the facts?

The assessee, a proprietor and partner in a firm, owned business premises used by the partnership firm. The Assessing Officer treated the notional rental income from these premises as taxable in the assessee's hands, as the assessee had not offered any income from house property. The CIT(A) upheld this addition.

What did the Tribunal hold?

The Tribunal held that if a property owned by a partner is used by the partnership firm for its business, no notional rental income is taxable in the hands of the partner. The Tribunal relied on previous decisions with similar facts.

What were the issues?

Whether notional rental income is taxable in the hands of a partner when the property owned by the partner is used by the partnership firm for its business purposes.

Which sections of the Income-tax Act were involved?

Section 22,Section 23(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI RAMA KANTA PANDA & Ms. ASTHA CHANDRA

For Appellant: Shri Nikhil S. Pathak
For Respondent: Shri Mukul Kulkarni

PER ASTHA CHANDRA, J.M.:

This appeal filed by the assessee is directed against the order dated 28-11-2025 of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi [“CIT(A)/NFAC”], u/s. 250 of the Income Tax Act, 1961 (the “Act”), pertaining to Assessment Year (“AY”) 2018-19. 2. Briefly stated, the facts of the case are that the assessee is a proprietor of a business unit, namely, PETALS carrying on the business of retail trade of readymade garments. The assessee is also a partner in a partnership firm, namely, M/s. PETAL NX, which is also carrying on the retail trade business of readymade garments. The business premises from where the assessee is carrying on its proprietary business as well

The order continues below.

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