Section 22 – Rental receipts for letting out of
terrace for erecting of antenna are chargeable to tax under the head
`Income from House Property’ subject to deductions u/s 24.
Facts: The
assessee had received Rs. 16,39,284 as rent for letting out terrace of
the building to six parties including Bharati Airtel, Hathway, etc. The
amount of rent was claimed to be chargeable to tax under the head
`Income from House Property’ subject to deduction u/s. 24(a). The
Assessing Officer (AO) relying on the decision of the Calcutta High
Court in the case of Model Manufacturing Co. Pvt. Ltd. (175 ITR 374)
held that the amounts received by the assessee from six parties was
chargeable under the head `Income from Other Sources’ and not `Income
from House Property’ as returned. He did not allow any deduction u/s. 57
of the Act.
Aggrieved, the assessee preferred an appeal to
CIT(A) who following the order of ITAT for earlier years for the same
issue in assessee’s own case held that rental of terrace has to be
assessed under the head `Income from House Property’ subject to
deduction u/s. 24.
Aggrieved, the revenue preferred an appeal to the Tribunal.
Held:
The Tribunal noted the following observations made by the `B’ Bench of
the Tribunal while deciding the appeals for the AY 2001-02, 2002-03 and
2003- 04 (ITA/5048/Mum/2004, 1433/Mum/2007 and 1434/ Mum/2007) in
assessee ‘s own case –
“35. Ground No. 5, 6,7 and 8 are against the sustenance of addition of rental income Rs. 5,93,700 as income from other sources.
36.
The brief facts of the above issue are that it was found by the
Assessing Officer that the assessee has allowed M/s. Hutchison Max
Telecom Ltd. to erect the tower on their terrace in consideration of an
amount of Rs. 5,93,700 and claimed as income from house property subject
to deduction u/s. 24 of the Act. However, the Assessing Officer while
observing that the assessee’s society has not provided any house
property to the company and it is only the open terrace which has been
let out, treated the same as assessable under the head income from other
sources without allowing any expenditure in this regard. On appeal the
ld. CIT(A) while confirming the Assessing Officer’s action treating the
income from other sources directed the Assessing Officer to allow 20% of
the gross receipts as expenses to earn such income.
39. After
carefully hearing the submissions of the rival parties and perusing the
material available on record we find that the facts are not in dispute.
We further find that in the case of Sharda Chamber Premises vs. ITO in
ITA No. 1234/M/08 dated 01-09-2009 for Assessment Year 2003-04 in which
JM was one of the party, on the similar facts, the Tribunal after
considering the decision in ITO vs. Cuffe Parade Sainara Premises
Co-operative Society Ltd. 7225/Mum/05 dated 28th April, 2008 for
Assessment Year 2002-03 and also the decision in the case of Sohan vs.
ITO (1986) 16 ITD 272 supra has held vide para 6 and 7 of its order
dated 01-09-2009 as under:
“6. We have carefully considered the
submissions of the rival parties and perused the material available on
record. We find merit in the plea of the ld. Counsel fo the assessee
that in the case of M/s. Dalamal House Commercial Complex Premises
Co-operative Society Ltd., the Tribunal while admitting the additional
ground being a legal issue has also held that the letting out of the
terrace, erection of antenna and income derived from letting out has to
be taxed as `income from house property’ and not as `income from other
sources’. The Tribunal while deciding the issue has followed the order
of the Tribunal in the case of M/s. Cuffe Parade Sainara Premises Co-op.
Society Ltd. (supra).
7. In the absence of any distinguishing
feature brought on record by the revenue we, respectfully following the
order of the Tribunal (supra) and keeping in view the consistency while
admitting the additional ground taken by the assessee hold that the
letting out of terrace has to be assessed under the head `income from
house property’ as against `income from other sources’ assessed by the
Assessing Officer and also allow deduction provided u/s. 24 of the Act
and accordingly the additional ground taken by the assessee is allowed.”
Respectfully following the order of the Tribunal supra, we are
of the view that the letting out of terrace has to be assessed under the
head income from house property subject to deduction u/s. 24 of the Act
as against income from other sources assessed by the Assessing Officer.
We hold and order accordingly. The grounds taken by the assessee are
therefore allowed.”
Following the above mentioned observations, the Tribunal decided the issue in favor of the assessee.
The appeal filed by the Revenue was dismissed.
