Case Law Details
In the appeal for assessment year 2000-01, the sole issue raised by the assessee is, whether the income received by the assessee on lease of a portion of terrace of the building and a wall of the building to one Mrs. Sudha Vora, for the purpose of fixing of hoarding, neon sign, etc., is assessable under the head “Income From Business or Profession” or under the head “Income From Other Sources”.
The Assessing Officer assessed the income under the head “Income From Other Sources” on the ground that the amount received by the assessee is not for letting of a building or terrace or any land appurtenant thereto but on account of allowing to display the advertisement of neon sign, illuminated hoarding, of a size of 60′ x 20′ on the terrace and also illuminated hoarding of size of 20′ x 50′ on a vertical wall of the building are facing Padder Road.
On Appeal ITAT held that that the letting out of terrace has to be assessed under the head “Income From House Property” as against “Income From Other Sources” assessed by the Assessing Officer and also allow deduction provided under section 24 of the Act. High Court has confirmed the order of ITAT .
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA no. 784, 785 & 786/Mum./2010
(A.Ys : 2000-01, 2001-02 & 2002-03)
M/s. Mahalaxmi Sheela Premises CHS Ltd.
v/s
Income Tax Officer
Date of Order – 30.8.2011
ORDER
PER J. SUDHAKAR REDDY, A.M.
These appeals preferred by the assessee, are directed against separate but identical impugned orders dated 11th December 2009, passed by the Commissioner (Appeals)-XXVII, Mumbai, for assessment years 2000-01, 2001-02 and 2002-03.
2. As the issues arising in all the years under consideration are common, except variation in figures, for the sake of convenience, these appeals are heard together and are being dispose off by way of this consolidated order.
2. We have heard the learned Counsel, Mr. Hiro Rai, on behalf of the assessee and the learned Departmental Representative, Mr. P.C. Mourya, on behalf of the Revenue.
3. In the appeal for assessment year 2000-01, the sole issue raised by the assessee is, whether the income received by the assessee on lease of a portion of terrace of the building and a wall of the building to one Mrs. Sudha Vora, for the purpose of fixing of hoarding, neon sign, etc., is assessable under the head “Income From Business or Profession” or under the head “Income From Other Sources”. The Assessing Officer assessed the income under the head “Income From Other Sources” on the ground that the amount received by the assessee is not for letting of a building or terrace or any land appurtenant thereto but on account of allowing to display the advertisement of neon sign, illuminated hoarding, of a size of 60′ x 20′ on the terrace and also illuminated hoarding of size of 20′ x 50′ on a vertical wall of the building are facing Padder Road.
4. On appeal, the Commissioner (Appeals) rejected the contention of the assessee on the ground that the terrace is not let out to Mr. Sudha Vora, and she has been allowed to use the terrace only to set-up the hoarding and to display the hoarding. He also commented that she could use only a portion of the terrace and that the purpose of utilization is not for stay, etc. The Commissioner (Appeals) distinguished the decision of the Delhi Bench of this Tribunal relied upon by the assessee. Aggrieved, the assessee is in further appeal before the Tribunal.
5. Before us, the learned Counsel relied on the following case laws:-
> ITO v/s Cuffe Parade Sainara Premises Co. Op. Society Ltd., ITA no. 7225/Mum./2005, order dated 28.4.2008;
> Dalamal House Commercial Complex Premises Co. Op. Society Ltd. v/s ITO, ITA no.2286/Mum./2008, 29.5.2009;
> Sharda Chambers Premises Co. Op. Society Ltd. v/s ITO, ITA no. 1234/Mum./2008, order dated 1.9.2009;
> Matru Ashish CHS Ltd. v/s ITO, ITA no.316/Mum./2010, order dated 27.8.2010;
> S. Sohan Singh v/s ITO, 16 ITD 272 (Del.); and
> CIT v/s Bajaj Bhavan Owners Premises Co. Op. Society Ltd., Income Tax Appeal no.3183 of 2010 (Bom.)
6. In Bajaj Bhavan Owners Premises Co. Op. Society Ltd. v/s ITO, Mumbai “B” Bench of the Tribunal in ITA no.5048/Mum./2004, assessment year 2001-02 and ITA no.1433/Mum./2007, for assessment year 2002-03 and ITA no. 1434/Mum./2007, for assessment year 2003-04, order dated 4th November 2009, has, at Page-16 / Para-36, brought out the facts as follows:-
“36. The brief facts of the above issue are that it was found by the Assessing Officer that the assessee has allowed M/s. Hutchison Max Telecom Ltd. to erect the tower on their terrace in consideration of an amount of r 5,93,700 and claimed as income from house property subject to deduction under section 24 of the Act. However, the Assessing Officer while observing that the assessee’s society has not provided any house property to the company and it is only the open terrace which has been let out, treated the same as assessable under the head income from other sources without allowing any expenditure in this regard. On appeal, the learned CIT(A) while confirming the Assessing Officer’s action treating the income from other sources directed the Assessing Officer to allow 20% of the gross receipts as expenses to earn such income.”
7. The Tribunal, after considering rival submissions, at Pages-17 & 18, Para-39, held as follows:-
“39. After carefully hearing the submissions of the rival parties and perusing the material available on record, we find that the facts are not in dispute. We further find that in the case of Sharda Chamber Premises v/s ITO, in ITA no.1234/Mum./2008, dated 1.9.2009, forA.Y. 2003-04, in which JM was one of the party, on the similar facts, the Tribunal after considering the decision in ITO v/s Cuffe Parade Sainara Premises Co. Op. Society Ltd., ITA no. 7225/Mum./2005, dated 28th April 2008, for A. Y. 2002-03 and also the decision in the case of S. Sohan v/s ITO (1986) 16 ITD 272 supra, has held vide Para-6 and 7 of its order dated 1.9.2009, as under:-
6. We have carefully considered the submissions of the rival parties and perused the material available on record. We find merit in the plea of the ld. counsel for the assessee that in the case of M/s. Dalamal House Commercial Complex Premises Co. Op. Society Ltd., the Tribunal while admitting the additional ground being a legal issue has also held that the letting out of the terrace erection of antenna and income derived from letting out has to be taxed as “income from house property” and not as “income from other sources”. The Tribunal while deciding the issue has followed the order of the Tribunal in the case of M/s. Cuffe Parade Sainara Premises Co. Op. Society Ltd. supra.
7. In the absence of any distinguishing feature brought on record by the revenue, we respectfully following the order of the Tribunal (supra) and keeping in view the consistency while admitting the additional ground taken by the assessee hold that the letting out of terrace has to be assessed under the head “Income From House Property” as against “Income From Other Sources” assessed by the Assessing Officer and also allow deduction provided under section 24 of the Act and accordingly the additional ground taken by the assessee is allowed.
Respectfully following the order of the Tribunal supra, we are of the view that the letting out of the terrace has to be assessed under the head income from house property subject to deduction u/s 24 of the Act as against income from other sources assessed by the Assessing Officer. We hold and order accordingly. The grounds taken by the assessee are therefore allowed.”
8. The Hon’ble Jurisdictional High Court in Income Tax Appeal no.3183 of 2010, vide judgment dated 16th August 2011, confirmed the aforesaid findings of the Tribunal vide Para3, which reads as follows:-
“3. As regards question (c) is concerned, counsel for the revenue states that the ITAT has allowed the claim of the assessee by following its decisions in the case of Sharda Chamber Premises v/s ITO and ITO v/s Cuffee Parade Sainara Premises Co. Op. Society Ltd. Counsel for the revenue fairly states that the appeals against the said decisions have not been filed by the Revenue in view of the smallness of the tax effect. However, the counsel for the revenue is not in a position to point out any error in the orders passed by the ITAT. In this view of the matter, we see no reason to entertain the appeal on question (c). In the result, the appeal is dismissed with no order as to costs.”
9. Keeping in view of the aforesaid binding judgment of the Hon’ble Jurisdictional High Court, we set aside the impugned order passed by the Commissioner (Appeals) and allow this ground raised by the assessee directing the Assessing Officer to assess the income in question under the head “Income From House Property”.
10. Insofar as other grounds raised by the assessee for assessment year 2000-01, the learned Counsel for the assessee did not wish to press these grounds and, hence, these are dismissed as “not pressed”.
11. In the result, assessee’s appeal for assessment year 2000-01 is partly allowed.
12. Now, we take up assessee’s appeal for assessment year 2001-02.
13. Before us, learned Counsel for the assessee did not wish to press grounds no.1, 2, 5 and 6 and, consequently, these grounds are dismissed as “not pressed”.
14. Insofar as ground no.3 is concerned, the learned Counsel for the assessee submits that the opening balance has been added under section 68 of the Act and that this is a case of double addition.
15. Before us, both the parties prayed that the issue may be restored back to the file of Assessing Officer for verifying as to whether this is a case of double addition. In view of the rival contentions, though we find that the addition has not been made under section 68, as alleged in this ground of appeal, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of Assessing Officer to verify as to whether the very same amount of 5,83,336, was brought to tax twice. We order accordingly.
16. Ground no.4 raised by the assessee for the year under consideration is similar to ground raised in assessment year 2000-01. Consistent with the view taken therein, we set aside the impugned order passed by the Commissioner (Appeals) and we allow this ground of appeal.
17. In the result, assessee’s appeal for assessment year 2001-02 is partly allowed.
18. Coming to the appeal for assessment 2002-03, learned Counsel for the assessee did not wish to press grounds no.1, 3, 4 and 5. Consequently, these are dismissed as “not pressed”.
19. Ground no.2 raised by the assessee for the year under consideration is similar to ground raised in assessment year 2000-01. Consistent with the view taken therein, we set aside the impugned order passed by the Commissioner (Appeals) and allow this ground of appeal.
20. In the result, assessee’s appeal for assessment year 2002-03 is also partly allowed.
21. To sum up, all the appeals filed by the assessee are partly allowed. Order pronounced in the open Court on 30th August 2011.
