Sections 22, 24 – Income earned by assessee, society, by letting out space on terrace for installation of mobile tower / antenna is taxable as “Income from House Property” and consequently, deduction u/s. 24(a) is allowable in respect of such income.

Sections 22,
24 – Income earned by assessee, society, by letting out space on terrace for
installation of mobile tower / antenna is taxable as “Income from House
Property” and consequently, deduction u/s. 24(a) is allowable in respect of
such income.

FACTS

The assessee, a co-operative society,
derived income by letting out space on terrace for installation of mobile
tower/antenna.  This income was declared
in the return of income, filed by the society, under the head `Income from
House Property’ and deduction u/s. 24(a) was claimed.

The Assessing Officer (AO) observed that the
terrace cannot be regarded as house property as it was a common amenity for
members.  He also observed that since the
conveyance was not executed, the society is not the owner of the premises.  The AO taxed the income under the head
“Income from Other Sources”.

Aggrieved, the assessee preferred an appeal
to the CIT(A) who confirmed the action of the AO.

Aggrieved, the assessee preferred an appeal
to the Tribunal.

HELD

The Tribunal observed that the issue before
it is, what is the nature of income received by the assessee for letting out
such space to the cellular operator/mobile company for installing and operating
mobile towers/antenna? It held that the terrace of the building cannot be
considered as distinct and separate but certainly is 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 amounts to letting-out a part of the house property itself. It held
that the observation of the AO that the terrace cannot be considered as house
property is unacceptable.

As regards the
observation of the Commissioner (Appeals) that the rental income received by
the assessee is in the nature of compensation for providing services and
facility to cellular operators, the Tribunal observed that the revenue has
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 has provided any other service or facilities to the cellular operators.

The Tribunal
directed the AO to treat the rental income received by the assessee from
cellular operator as income from house property and allow deduction u/s. 24(a).