Section 22 of the Income Tax Act

Income-tax Act, 2025: s.20

Section 22 of the Income-tax Act, 1961 corresponds to section 20 (Income from house property) of the Income-tax Act, 2025.

Read section 20 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 22 is Chennai Properties & Investments Ltd. v. CIT (373 ITR 673), cited in 381 of the 644 judgments on BharatTax that turn on this section.

Leading authorities on Section 22

Chennai Properties & Investments Ltd. v. CIT
373 ITR 673 · 2015 · Supreme Court
381
citing judgments

Income from immovable property, such as unsold flats or shops, held by an assessee as stock-in-trade in their business of acquiring and holding properties is taxable as 'business income' and not 'income from house property'. Consequently, notional annual letting value under Section 23 cannot be attributed to such stock-in-trade.

CIT v. Ansal Housing Finance & Leasing Co. Ltd.
354 ITR 180 · 2013 · High Court
208
citing judgments

Annual Letting Value (ALV) of unsold stock-in-trade flats/shops held by a real estate developer can be assessed under Section 22 of the Income Tax Act, 1961, as income from house property. This approach was followed by the Assessing Officer (AO) based on this decision.

Shambhu Investment (P) Ltd. v. CIT
263 ITR 143 · 2003 · Supreme Court
181
citing judgments

Income derived from letting out property along with incidental use of furniture, fixtures, and common facilities is assessable as 'income from house property' and not 'business income' when the prime object is merely to let out and not to exploit the property as a business asset.

Berger Paints India Ltd. v. CIT
266 ITR 99 · 2004 · Supreme Court
181
citing judgments

The Revenue cannot take a conflicting stand from what it had earlier accepted in a previous assessment year without compelling justification. This principle of consistency applies to various issues, including the treatment of customs duty in closing inventory.

Radhasoami Satsang v. CIT
244 ITR 734 · 2000 · High Court
168
citing judgments

The Revenue is bound by the rule of consistency and cannot adopt a divergent position in a subsequent assessment year unless there is a change in facts or law.

CIT v. Tip Top Typography
368 ITR 330 · 2014 · High Court
161
citing judgments

For computing income from house property, the Annual Letting Value (ALV) cannot be arbitrarily estimated by the Assessing Officer, but must be determined based on the Municipal ratable value of the property.

Sultan Bros. (P) Ltd. v. CIT
51 ITR 353 · 1964 · Supreme Court
148
citing judgments

Income derived from letting out property is classified as business income only if the letting activity constitutes a business from a businessman's perspective, rather than mere exploitation of property by an owner. The company's object clause is not the sole determinative factor in this assessment.

East India Housing and Land Development Trust Ltd. v. CIT
42 ITR 49 · 1961 · Supreme Court
147
citing judgments

Rental income from immovable property owned by an assessee must be assessed under the head 'Income from House Property' (Section 22), even if the assessee is engaged in the business of real estate or property development and leasing. This emphasizes the mandatory classification of income under its specific statutory head.

CIT v. Neha Builders Pvt. Ltd.
296 ITR 661 · 2008 · High Court
129
citing judgments

Income from unsold flats held as stock-in-trade by a builder or developer is assessable as business income, not income from house property, for assessment years prior to the insertion of Section 23(5) of the Income-tax Act.

CIT v. Sridev Enterprises
192 ITR 165 · 1991 · High Court
125
citing judgments

Interest expenditure on borrowed funds, especially when used for making advances, should generally be allowed under Section 36(1)(iii) if its nature and business expediency remain consistent with previous assessment years. The character of an outstanding amount at the start of an accounting year is considered the same as at the end of the prior year, reinforcing the rule of consistency.

Judgments on Section 22

Gobichettipalayam Rev Div Vao & Va Co-Op Thrift & Credit Society Ltd., Erode vs. ITO, Ward-2(1), Erode

The appeal stands partly allowed

ITA 3218/CHNY/2024[2021-22]Status: DisposedITAT Chennai30 Apr 2025AY 2021-22

Bench: Hon’Ble Shri Aby T. Varkey, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.3217/Chny/2024 (िनधा'रण वष' / Assessment Year: 2020-21) & 2. आयकरअपील सं./ Ita No.3218/Chny/2024 (िनधा'रण वष' / Assessment Year: 2021-22) M/S Gobichettipalayam Income Tax Officer Rev Dev Vao & Va T&C Ward 2(1) बनाम/ Society Ltd. Erode 72, North Park Street Vs. Gobichettipalayam Taluk, Erode – 638452 "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aacag-0315-P (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" की ओर से/ Appellant By : Shri S. Bhupendran (Advocate) – Ld. Ar " थ" की ओर से/Respondent By : Ms. Gouthami Manivasagam (Jcit) – Ld. Sr. Dr सुनवाई की तारीख/Date Of Hearing : 29-04-2025 घोषणा की तारीख /Date Of Pronouncement : 30-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeals By Assessee For Assessment Years (Ay) 2020- 21 & 2021-22 Have Identical Facts. First, We Take Up Appeal For Ay 2020-21 Which Arises Out Of An Order Passed By Ld. Addl. / Joint Commissioner Of Income Tax (Appeals)-1, Vishakhapatnam [Cit(A)] On 25-11-2021. The Sole Issue That Arises In The Appeal Is Claim Of Deduction

For Appellant: Shri S. Bhupendran (Advocate) – Ld. ARFor Respondent: Ms. Gouthami Manivasagam (JCIT) – Ld. Sr. DR
Section 22Section 5Section 57Section 80P(2)(a)Section 80P(2)(d)

Gobichettipalayam Rev Div Vao & Va Co-Op Thrift & Credit Society Ltd., Erode vs. ITO, Ward-2(1), Erode

The appeal stands partly allowed

ITA 3217/CHNY/2024[2020-21]Status: DisposedITAT Chennai30 Apr 2025AY 2020-21

Bench: Hon’Ble Shri Aby T. Varkey, Jm & Hon’Ble Shri Manoj Kumar Aggarwal, Am 1. आयकरअपील सं./ Ita No.3217/Chny/2024 (िनधा'रण वष' / Assessment Year: 2020-21) & 2. आयकरअपील सं./ Ita No.3218/Chny/2024 (िनधा'रण वष' / Assessment Year: 2021-22) M/S Gobichettipalayam Income Tax Officer Rev Dev Vao & Va T&C Ward 2(1) बनाम/ Society Ltd. Erode 72, North Park Street Vs. Gobichettipalayam Taluk, Erode – 638452 "थायीलेखासं./जीआइआरसं./Pan/Gir No. Aacag-0315-P (अपीलाथ"/Appellant) : (" थ" / Respondent) अपीलाथ" की ओर से/ Appellant By : Shri S. Bhupendran (Advocate) – Ld. Ar " थ" की ओर से/Respondent By : Ms. Gouthami Manivasagam (Jcit) – Ld. Sr. Dr सुनवाई की तारीख/Date Of Hearing : 29-04-2025 घोषणा की तारीख /Date Of Pronouncement : 30-04-2025 आदेश / O R D E R Manoj Kumar Aggarwal () 1. Aforesaid Appeals By Assessee For Assessment Years (Ay) 2020- 21 & 2021-22 Have Identical Facts. First, We Take Up Appeal For Ay 2020-21 Which Arises Out Of An Order Passed By Ld. Addl. / Joint Commissioner Of Income Tax (Appeals)-1, Vishakhapatnam [Cit(A)] On 25-11-2021. The Sole Issue That Arises In The Appeal Is Claim Of Deduction

For Appellant: Shri S. Bhupendran (Advocate) – Ld. ARFor Respondent: Ms. Gouthami Manivasagam (JCIT) – Ld. Sr. DR
Section 22Section 5Section 57Section 80P(2)(a)Section 80P(2)(d)

Pramukh Aranya Developers, Junagadh vs. Pr. CIT, Rajkot-1, Rajkot

In the result, the appeal of the assessee (in ITA No

ITA 372/RJT/2024[2018-19]Status: DisposedITAT Rajkot28 Apr 2025AY 2018-19

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं./Ita No.372 /Rjt/2024 (निर्धारण वर्ष/Assessment Year: (2018-19) M/S. Pramukh Aranya Developers Office No. 5, First Floor, Cit Centre, Opp. New Collector Officer, B/H. Sardar Baug, Junagadh - 362001 The Pr. Cit-1, Vs. Aayakar Bhawan, Race Course Ring Road, Rajkot - 360001 स्थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aaofp3393F (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) निर्धारिती की ओर से/Appellant By राजस्व की प्रत्यर्थी ओर से/Respondent By : Shri Mehul Ranpura, Ld. Ar : Shri Sanjay Punglia, Ld.Cit (Dr) सुनवाई की तारीख / Date Of Hearing घोषणा की तारीख/Date Of Pronouncement Per Dr. A. L. Saini, Am: : 04/02/2025 : 28/04/2025 आदेश / Order By Way Of This Appeal, The Assessee Has Challenged The Correctness Of The Order Dated 30.03.2024, Passed By The Learned Principal Commissioner Of Income- Tax (In Short “Ld Pcit"), Under Section 263 Of The Income-Tax Act, 1961 (Hereinafter Referred To As 'The Act'), For The Assessment Year2018-19.Grievances Raised By The Assessee, Which, Being Interconnected, Will Be Taken Up Together, Are As Follows: M/S. Pramukh Aranya Developers V. Pcit

For Respondent: Shri Mehul Ranpura, Ld. AR
Section 143(3)Section 22Section 23(5)Section 263

DCIT, Range-3, Lucknow vs. M/S Welldone Infrastructure Pvt. Ltd., Lucknow

In the result, the appeal of the Revenue is dismissed

ITA 406/LKW/2020[2017-18]Status: DisposedITAT Lucknow22 Apr 2025AY 2017-18

Bench: Sh.Sudhanshu Srivastava & Sh. Nikhil Choudharya.Y.2017-18 Dy. Commissioner Of Income Tax, Vs. M/S Welldone Infrastructure Range-3, Lucknow Private Limited, Lucknow Pan:Aaacw6354Q (Appellant) (Respondent) Assessee By: Sh. B.P. Yadav, Advocate Revenue By: Sh. Amit Singh Chauhan, Addl (Cit) & Sh. Sunil Kumar Rajwanshi, Addl Cit (Dr) Date Of Hearing: 10.02.2025 Date Of Pronouncement: 22.04.2025 O R D E R Per Nikhil Choudhary, A.M.: This Is An Appeal Filed By The Revenue Against The Order Of The Ld. Cit(A)-2, Lucknow Under Section 250 Of The Income Tax Act, 1961 Allowing The Appeal Of The Assessee Against The Order Passed By The Ld. Ao Under Section 143(3) On 19.12.2019. The Grounds Of Appeal Are As Under:- “1. That The Ld. Cit(A)-2, Lucknow Has Erred In Law & On Facts In Deleting The Addition Of Rs.2,26,72,571/- Without Appreciate The Fact That The Assessee Is Involved In The Business Of Developing Properties & Selling It & Is Earning Rental Income Which Is Incidental To The "Revenue From Business Operations" Of The Assessee. 2. Ld. Cit(A) Had Erred In Law & On Facts Ignoring The Fact That The Assessee, While Filing Original Return Of Income Had Itself Considered That Rental Are In The Nature Of Revenue From Business Operations.

For Appellant: Sh. B.P. Yadav, AdvocateFor Respondent: Sh. Amit Singh Chauhan, Addl (CIT) & Sh
Section 143(3)Section 22Section 250