Case Law Details
Bimanagar Co. Op. Housing Society Ltd. Vs ITO (ITAT Ahmedabad)
Assessee Society is a tenement co-operative housing society, in which ownership of the land and building vests in the society itself, and not the member of society. This legal distinction, in principle, in recognized by Hon’ble jurisdictional High Court in the case of Mulshankar Kunwerji Gor & Ors. v. J.S. Judga (AIR 1980 Guj. 62). The very foundation of stand taken by the authorities below is thus legally unsustainable. Coming to the connotations of “land appurtenant thereto” in the expression ‘building or land appurtenant thereto’, it does not mean that land should be used as an integral part of the building as a unit. The assessee in the present case is owner of entire set of housing units, which can be collectively referred to as housing complex, and, the vacant land in this complex is thus essentially an integral part of the housing complex. As observed by the Hon’ble Karnataka High Court in the case of CN Ananthram v. ACIT (judgment dated 10-10-2014 in ITA No. 1012 of 2008), which is equally valid in the present context.” When the legislature has used the word ‘or- which means the word buildings or land appurtenant thereto should be understood disjunctively having regard to the context in which it is used, it cannot be read as ‘and’ as clearly, therefore, land being appurtenant to the building is sufficient; it need not be integral part of the building itself. In any case, having seen pictures of hoardings in question, I am satisfied that land on which hoarding rights were given is appurtenant to the building and cannot be viewed on standalone basis.
In the present case also, the consideration received by the assessee is for the right to install the hoarding rather than rent for hoarding installed by the assessee. The above observations are thus equally valid in the present context.
In view of the above discussions, as also bearing in mind entirety of the case, I hold that the income earned by the assessee, in consideration of having given rights to have play hoardings etc. are taxable as income from house property. Accordingly, deduction under section 24(a) was indeed admissible in the present case.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
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