Sections 22, 56 – Rent received for renting of terrace for installation of mobile antennas is chargeable to tax under the head `Income from House Property’. It is wholly irrelevant as to whether the antenna is part of the building or land appurtenant thereto. As long as the space which has been rented out is part of the building the rent is required to be treated as `income from house property’.

In the return of income filed by the assessee, an individual, amounts aggregating to Rs.2,91,723 received from Bharati Airtel and Idea Cellular Limited towards renting out its terrace for use by these companies for installing mobile antennas were offered for taxation under the head `Income from House Property’. The assessee had claimed deduction @ 30% u/s. 24(a) of the Act. In the course of assessment proceedings, the Assessing Officer (AO) considered this sum of Rs.2,91,723 to be chargeable to tax under the head `Income from Other Sources’. He denied deduction of Rs.87,516 claimed u/s. 24(a) and added back this sum to the total income. Aggrieved, the assessee preferred an appeal to CIT(A) who confirmed the action of the AO by relying on the decision of Calcutta High Court in the case of Mukherjee Estate (P.) Ltd. vs. CIT 161 CTR 470 (Cal). Aggrieved, the assessee preferred an appeal to the Tribunal.

HELD

The Tribunal noted that under the terms of the leave and license agreement entered into by the assessee rent was for use of “roof and terrace” area (not more than 900 sq. ft. in case of Bharti Airtel and not more than 800 sq. ft. in case of Idea Cellular Ltd.). The installations mentioned in the leave and license agreement, which were permitted, were to be done by the companies. The obligation of the assessee did not exceed beyond permitting use of space for such installations. There was no dispute on the fact that the assessee was the owner of the property. The CIT(A) upheld the taxability under the head `income from other sources’ and thus rejected the claim of deduction u/s. 24(a) on the basis of his understanding of the law laid down by the Calcutta High Court. The Tribunal held that the reliance of CIT(A) on the decision of the Calcutta High Court in the case of Mukerjee Estates (P) Ltd. was misplaced since in that case the Tribunal had given a categorical finding that the assessee had let out the hoardings and the assessee had failed to substantiate whether the roof was let out or the hoarding was let out. Undisputedly, the assessee was the owner of the property. Rent was for space to host the antennas and not for the antennas. The Tribunal held that since rent is for the space, terrace and roof space in this case, and which space is certainly a part of the building, the rent can only be taxed as `income from house property’. The appeal filed by the assessee was allowed.