Terrace Letting Income is income from house property

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

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