Whether rent received from mobile company for use of terrace to install antenna is taxable as "Income from house property" or "Other sources" u/s 22?

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI E BENCH, NEW DELHI

[Coram: Pramod Kumar AM and A. T. Varkey JM]

I.T.A. No.: 3976/Del/13

Assessment year: 2009-10

Manpreet Singh

Appellant

26/113, West Patel Nagar

New Delhi 110 008

[PAN AYBPS4339R]

Versus.

Income Tax Officer

Ward 33(3), New Delhi

Respondent

Appearances by:

Satish Aggarwal, for the appellant

Gaurav Dudeja, for the respondent

O R D E R

Per Pramod Kumar:

1. By way of this appeal, the assessee appellant has challenged correctness of the order dated 26th April 2013 passed by the learned Commissioner(Appeals) in the matter of assessment under section 143(3) of the Income TaxAct, 1961 for the assessment year 2009-10.

2. The short issue that we are really required to adjudicate in this appeal is whether or not deduction under section 24(a) @ 30% of the annual value is available in respect of computation of income under the head ‘income from house property’ in respect of income from renting of terrace for installation of mobile antenna.

3, Briefly stated, the relevant material facts of the case are as follow. The assessee before us, an individual, had received sums aggregating to Rs. 2,91,723from Bharati Airtel Limited and Idea Cellular Limited, towards renting out its terrace for the use by these companies as places where as, mobile communication service providers, the companies had installed antennas. The assessee had also claimed a deduction @ 30%, under section 24(a), from the rental income so received. However, this claim for deduction did not find favour with the Assessing Officer. In the course of scrutiny assessment proceedings, the Assessing Officer rejected this claim for deduction on the ground that, “income regarding installation of antenna” was taxable under the head “income from other sources” whereas deduction under section 24(a) could only be allowed in respect of such income as was taxable under the head “income from house property”. The deduction of Rs 87,516 was thus added back to income of the assessee. Aggrieved by the stand so taken by the Assessing Officer, assessee carried the matter in appeal before the CIT(A) but without any success. Learned CIT(A) upheld the stand of the Assessing Officer, and, while doing so, observed as follows:

5. I have considered the facts of the case and the submissions made on behalf of the appellant. I have also perused the case law relied upon by the AR of the appellant. A question was posed before the Hon’ble High Court of Calcutta in the case of Mukherjee State Pvt.Ltd. vs. CIT (2000) 244 ITR 1 (Cal) that when the hoardings are fixed to the building, the rent derived from such hoardings meant for advertisement purposes, be treated as income from property? The Hon’ble High Court has held that if the rent is only for fixing the hoarding, it cannot be treated as part of the building, nor could it be treated as land appurtenant thereto, therefore such income will have to be separately considered as income from other sources. On the same analogy, rent from the installation of mobile antennae which has been erected on the top at the building would not be taxable under the head “income from property” as the rent was only for providing space for installation of the mobile antennae on the top of building, and the same cannot be treated as part of the building nor can it be treated as land appurtenant thereto. Therefore, such income is taxable under the head income from other sources. The Assessing Officer has thus rightly treated the income from installation of mobile antennae as income from other sources and denied the deduction u/s 24(a) of the IT Act, 1961 claimed by the appellant. Accordingly, the Assessing Officer’s action is upheld.

4. The assessee is not satisfied and is in further appeal before us.

To read the full judgment, please find the attached file:

Attached file:

http://www.itatonline.in:8080/itat/upload/-548788611815503473613$5%5E1REFNOManpreet_Singh_3976_Del_2013.pdf