Section 22, 24(4) and 56 – Income earned by assessee from letting out space on terrace for installation of mobile tower/antenna was taxable as ‘income from house property’ and, therefore, deduction u/s. 24(a) was available in respect of it.

2.      
(2019) 197 TTJ (Mumbai) 966 Kohinoor
Industrial Premises Co-operative Society Ltd. vs. ITO ITA No.:
670/Mum/2018 A. Y.: 2013-14 Dated: 5^th
October, 2018

Section 22, 24(4) and 56 – Income earned by
assessee from letting out space on terrace for installation of mobile
tower/antenna was taxable as ‘income from house property’ and, therefore,
deduction u/s. 24(a) was available in respect of it.

FACTS

 The assessee, a co-operative society, had
derived income from letting out some space on terrace for installation of
mobile towers/antenna which was offered “as income from house
property”. Further, against such income the assessee had claimed deduction
u/s. 24(a). The Assessing Officer observed that, the terrace could not be
termed as house property as it was the common amenity for members. Further, the
Assessing Officer observed that the assessee could not be considered to be
owner of the premises since as per the tax audit report, conveyance was still
not executed in favour of the society. He also observed that the annual letting
value of the terrace was not ascertainable. Accordingly, he concluded that the
income received by the assessee from the mobile companies towards installation
of mobile towers/antenna was to be treated as “income from other
sources”.

Aggrieved by the assessment order, the
assessee preferred an appeal to the CIT(A). The CIT(A) confirmed the order of
the Assessing officer on grounds that the income received by the assessee was
in the nature of compensation received for providing facilities and services to
cellular operators on the terrace of the building.

HELD

The Tribunal
held that the terrace of the building could not be considered as distinct and
separate but certainly was a part of the house property. Therefore, letting-out
space on the terrace of the house property for installation and operation of
mobile tower/antenna certainly amounted to letting-out a part of the house
property itself. That being the case, the observation of the Assessing Officer
that the terrace could not be considered as house property was unacceptable. As
regards the observation of the CIT(A) that the rental income received by the
assessee was in the nature of compensation for providing services and facility
to cellular operators, it was relevant to observe, the department had failed to
bring on record any material to demonstrate that in addition to letting-out
space on the terrace for installation and operation of antenna, the assessee
had provided any other service or facilities to the cellular operators. Thus,
from the material on record, it was evident that the income received by the
assessee from the cellular operators/mobile companies was on account of letting
out space on the terrace for installation and operation of antennas and nothing
else. Therefore, the rental income received by the assessee from such
letting-out had to be treated as income from house property.