Section 24(a) of the Income Tax Act

Income-tax Act, 2025: s.22

Section 24(a) falls under section 24 of the Income-tax Act, 1961, which corresponds to section 22 (Deductions from income from house property) of the Income-tax Act, 2025.

Read section 22 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 24(a) is CIT v. Neha Builders Pvt. Ltd. (296 ITR 661), cited in 129 of the 318 judgments on BharatTax that turn on this section.

Leading authorities on Section 24(a)

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.

Radha Devi Dalmia v. CIT
125 ITR 134 · 1980 · High Court
55
citing judgments

When determining income from house property under Section 23, the Annual Letable Value (ALV) can be estimated by deeming 7% of the property's value as notional rent, particularly when actual rent or other clear basis for ALV is absent.

CIT v. Motilal Hirabhai Spg. And Wvg. Co. Ltd.
113 ITR 173 · 1978 · High Court
49
citing judgments

The determination of whether share transactions constitute a business activity or an investment depends on the facts of the case. Factors like volume, frequency, and regularity indicate business activity, irrespective of how such transactions are presented in accounts.

CIT v. Cocanada Radhaswami Bank Ltd.
57 ITR 306 · 1965 · Supreme Court
46
citing judgments

The nature of the activity giving rise to income is fundamental in determining the deductibility of expenses. Interest on loans for acquiring properties held as current assets is a deductible business expenditure if incurred for business purposes.

CIT v. Neha Builders (P.) Ltd.
164 Taxmann 342 · 2007 · High Court
30
citing judgments

When a builder's business involves constructing and selling property, unsold units are considered stock-in-trade and income derived from them is taxable under the head 'Business Income', not 'Income from House Property'.

PCIT v. Earth Minerals Co. Ltd.
162 Taxmann.com 272 · 2024 · Supreme Court
13
citing judgments

A revision order under Section 263 is invalid if the Principal Commissioner passes it without conducting an inquiry or causing one to be made. The revisionary powers under Section 263 are not unfettered and require a proper inquiry.

CIT v. D.N. Dosani
280 ITR 275 · 2006 · High Court
13
citing judgments

When an assessment is reopened under Section 263, the Assessing Officer's power to make a fresh assessment is confined only to the specific issues directed by the Commissioner for revision. The Assessing Officer cannot consider other items not part of the revisional direction.

Azimganj Estate Pvt. Ltd. v. CIT
352 ITR 82 · 2013 · High Court
12
citing judgments

Rental income from unsold flats in a construction business is assessable as income from house property, not business income. Consequently, deductions under section 24(a) are allowable.

Mangla Homes\n(P) Ltd. v. ITO
360 ITR 187 · 2014 · High Court
10
citing judgments
403 ITR 453 (Kar) (FB) Swire Holdings (P.) Ltd. v. ITO
6 SOT 621 · 2006 · ITAT
5
citing judgments

Judgments on Section 24(a)

Biwanath Lohia, Kolkata vs. The ITO, WD-48(3), Kolkata

In the result, appeal filed by the assessee is allowed for statistical purposes

ITA 1289/KOL/2016[2006-07]Status: DisposedITAT Kolkata13 Jan 2017AY 2006-07

Bench: Shri S.S.Viswanethra Ravi, Jm & Dr. A.L.Saini, Am आयकर अपील सं./Ita No.1289/Kol/2016 ("नधा"रण वष" /Assessment Year:2006-2007) Biswanath Lohia, Huf, Vs. Ito, Ward-48 (3), 171/1, Jn Mukherjee Road, 3, Govt. Place(W) Salkia, Howrah-6, Kolkata-700001 C/O: Sri Jitendra Kaushik, Advocate, 19-D, Muktaram Babu Street, Kolkata-700007 "थायी लेखा सं./जीआइआर सं./Pan/Gir No.: Aaehb 6352 A .. (अपीलाथ" /Appellant) (""यथ" / Respondent) Assessee By : Shri Nirmal Kaushik, Advocate Revenue By : Md. Ghyas Uddin, Jcit सुनवाई क" तार"ख / Date Of Hearing : 05/01/2016 घोषणा क" तार"ख/Date Of Pronouncement 13/01/2017 आदेश / O R D E R Per Dr. Arjun Lal Saini, Am: The Captioned Appeal Filed By The Assessee, Pertaining To The Assessment Year 2006-07, Is Directed Against The Order Passed By Ld. Commissioner Of Income Tax (Appeals)-14, Kolkata, In Appeal No.15/Cit(A)-14Wd-47(3)/2011-12, Dated 28.04.2016, Which In Turn Arises Out Of An Order Passed By The Assessing Officer (Ao) Under Section 143(3)/154 Of The Income Tax Act 1961, (In Short The ‘Act’), Dated 28.03.2011. 2. Brief Facts Of The Case Qua The Assessee Are That The Assessee Filed Its Return Of Income On 8.11.2006 Declaring Total Income Of Rs.1,05,810/-. Asessee’S Case Was Selected For Scrutiny U/S.143(3) & The Ao Has Completed The Assessment By Making Various Additions. Later On, The Assessing Officer Passed The Rectification Order Under Section 154 Of The Act Observing That Deduction U/S 24(A) Of The I.T. Act Was Wrongly Allowed To The Assessee. Assessing Officer Observed That The Assessee Is Not Owner Of Any House Property & An Amount Received By The Assessee

For Appellant: Shri Nirmal Kaushik, AdvocateFor Respondent: Md. Ghyas Uddin, JCIT
Section 143(3)Section 154Section 24