Case Law Details
Chaitanya Developers Vs Addl. CIT (ITAT Mumbai)
In the given case the assessee is a partnership firm engaged in the business of builders and developers. During the course of assessment proceedings the Assessing Officer (AO) observed that the assessee had received hoarding charges of Rs. 41,80,000/- from M/s Dezen Products for advertising display on boundary walls and the same was offered for taxation under the head “Income from House Property”. In response to a query raised by the AO to explain as to why the receipts on account of advertising display charges should not be assessed under the head “Income from Other Sources” instead of “Income from House Property”
On the perusal of the conveyance agreement of the P/B filed by assessee clearly indicates that the appellant is the “owner” of the concerned property at Louis Mansion, at Mahim, Mumbai. The above documents were also filed before the AO. The appellant had obtained development rights of the re-development project at Louis Mansion, Mahim and therefore, is the owner of the re-development rights of the said society. The provisions of section 22 of the Act, defining income from house property reads as under:
“22. The annual value of property consisting of any building or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purpose of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head “Income from house property”.
In the case of Niagara Hotels & Builders (P.) Ltd. (supra), the assessee company was absolute owner of a terrace floor. It entered into an agreement with a telecom company and gave said floor on license as space for mounting tower and antenna. The assessee claimed the amount of license fee as ‘Income from House Property’. The AO opined that since the property was reflected as ‘commercial asset’, income derived there from was to be assessed as business income. The Hon’ble High Court held that :
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