Hariharan & family, an HUF, owns a property which has been let out to the partnership firm "Trade n Trade" carrying on business. Hariharan & family, HUF is a partner in the firm Trade n Trade through its Karta Ha

Chargeability to Income from House Property As per the provision of section 22 of the Income Tax Act, 1961, the Annual Value (ALV) of a property is chargeable to tax under the head "Income from house property" in the hands of the owner. However, this section specifically excludes property occupied for the purposes of own business or profession of the assessee, the profits of which are chargeable to Income-tax. Madras High Court in the case of CIT vs. Shri Champalal Jeevraj (1995) 215 ITR 289 has observed that where the Karta of the HUF is a partner in the firm in his representative capacity and the firm occupied a portion of the house belonging to the HUF, the benefit of exclusion under section 22 was available to the HUF. This is based on the premise that business carried on by a firm is a business carried on by each partner. Hence the business here is carried on by one of the partners here. Hence, the income from the property given to firm for business use shall not be chargeable to tax under the head "Income from house property". Therefore, in this case, the action of the Assessing Officer is not correct.