M/S RAYALA CORP. PVT LTD vs ASSISTANT COMMISSIONER OF INCOME TAX,CHE

The Supreme Court held that income derived from renting out property by a company engaged in real estate business should be classified as 'Profits and gains of business or profession' rather than 'Income from House Property', as established in Chennai Properties and Investments Ltd. v. CIT [2015] 373 ITR 673 (SC). The Court emphasized that the nature of the business activities and the intention behind renting out the property are critical in determining the appropriate tax classification. The appeals were allowed, overturning the lower court's decision that classified the income as house property income.