CITI CENTRE PREMISES CO-OP SOCIEETY LTD., MUMBAI V. ITO -WD- 31(1)(3), MUMABI

ITA 3029/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5799 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 10-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONI
• Assessee Lawyers: LALCHAND CHOUDHARY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 3029/MUM/18 2014-15 CITI CENTRE PREMISES CO-OP. SOCIETY LTD., SHOP NO. 57, CITI CENTRE, S.V. ROAD, GOREGAON (WEST), MUMBAI [PAN: AAAAC2287Q] THE INCOME TAX OFFICER, WARD-31(1)(3), MUMBAI 3030/MUM/18 2013-14 APPELLANT BY : SHRI LALCHAND CHOUDHARY, AR RESPONDENT BY : SHRI VIJAY KUMAR SONI, DR DATE OF HEARING : 28-01-2019 DATE OF PRONOUNCEMENT : 01-02-2019 O R D E R BOTH THESE APPEALS ARE FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE COMBINED ORDER OF THE LD. COMMISS IONER OF INCOME TAX (APPEALS)-42, MUMBAI, DATED 28-02-201 8, FOR THE AYS. 2013-14 & 2014-15. SINCE THE FACTS AND ISSUES INVOLVED IN THESE APPEALS ARE COMMON AND IDENTICAL, B OTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOS ED BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 3029 & 3030/MUM/2018 : 2 : 2. THE GROUNDS RAISED BY THE ASSESSEE FOR THE AY. 201 3-14 ARE AS UNDER: THE APPELLANT PREFERS THE FOLLOWING APPEAL AGAINST THE ORDER DATED 28/02/2018 OF THE COMMISSIONER OF INCOME TAX (APPEA LS)-42, MUMBAI, (HEREINAFTER REFERRED TO AS 'THE GT (A)'} P ASSED UNDER SECTION 250(6) OF THE INCOME TAX ACT, 1961 ('THE AC T'). EACH OF THE GROUNDS IS IN ALTERNATIVE AND WITHOUT PREJUDICE TO OTHER. 1.0: ON FACTS AND IN LAW AND IN THE CIRCUMSTANCES OF THE CASE. HON'BLE CIT (A) ERRED IN CONFIRMING THE DISALLOWANC E OF DEDUCTION OF RS. 641,749 (CORRECT AMOUNT - RS. 652,712) U/S 24(A ) OF THE INCOME TAX ACT, 1961 BY DISREGARDING THE FACT THAT RENTAL INCOME RECEIVED BY A CO-OPERATIVE SOCIETY FOR LETTING OUT THE BUILDING TERRACE AND PERMITTING ERECTION AND INSTALLING OF CELL PHONE TO WERS THEREON IN THE BUILDING OWNED BY THE SOCIETY IS PROPERLY ASSESSABL E ONLY UNDER THE HEADING 'INCOME FROM HOUSE PROPERTY' AND AS SUCH ST ATUTORY DEDUCTION UNDER SECTION 24(A) IS LEGITIMATELY PERMI SSIBLE. 1.1: ON FACTS AND IN LAW, HON'BLE CIT (A) FAILED TO APPRECIATE THAT THE ASSESSES SOCIETY BEING OWNER OF THE BUILDING, R ENTAL INCOME RECEIVED BY THE ASSESSES - SOCIETY FOR LETTING OUT THE BUILDING TERRACE AND PERMITTING ERECTION AND INSTALLING OF CELL PHON E TOWERS THEREON IN THE BUILDING CANNOT BE ASSESSED AS INCOME FROM OTHE R SOURCES. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND OR DELETE ALL OR ANY OF THE AFORESAID GROUNDS OF APPEAL. 3. THE GROUNDS RAISED BY THE ASSESSEE FOR THE AY. 201 4-15 ARE AS UNDER: THE APPELLANT PREFERS THE FOLLOWING APPEAL AGAINST THE ORDER DATED 28/02/2018 OF THE COMMISSIONER OF INCOME TAX (APPEA LS]-42, MUMBAI, {HEREINAFTER REFERRED TO AS 'THE CIT (A)'} PASSED UNDER SECTION 250(6) OF THE INCOME TAX ACT, 1961 ('THE AC T'). EACH OF THE GROUNDS IS IN ALTERNATIVE AND WITHOUT PREJUDICE TO OTHER. 1.0: ON FACTS AND IN LAW AND IN THE CIRCUMSTANCE S OF THE CASE, HON'BLE CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION OF RS. 497,730 (IN FACT CORRECT AMOUNT OF DISALLOWANCE IS ONLY RS. 497,730 BEING THE AMOUNT OF DEDUCTION U/S 24(A) CLAIMED BY ITA NOS. 3029 & 3030/MUM/2018 : 3 : THE APPELLANT AND NOT RS. 641,749 AS ERRONEOUSLY RE CORDED BY THE CIT(A)) CLAIMED BY THE APPELLANT U/S 24(A) OF THE I NCOME TAX ACT, 1961 BY DISREGARDING THE FACT THAT RENTAL INCOME RE CEIVED BY A CO- OPERATIVE SOCIETY FOR LETTING OUT THE BUILDING TERR ACE AND PERMITTING ERECTION AND INSTALLING OF CELL PHONE TOWERS THEREO N IN THE BUILDING OWNED BY THE SOCIETY IS PROPERLY ASSESSABLE ONLY UN DER THE HEADING 'INCOME FROM HOUSE PROPERTY AND AS SUCH STATUTORY D EDUCTION UNDER SECTION 24(A) IS LEGITIMATELY PERMISSIBLE, 1.1: ON FACTS AND IN LAW, HON'BLE CIT (A) FAILED TO APPRECIATE THAT THE ASSESSES SOCIETY BEING OWNER OF THE BUILDING, R ENTAL INCOME RECEIVED BY THE ASSESSEE - SOCIETY FOR LETTING OUT THE BUILDING TERRACE AND PERMITTING ERECTION AND INSTALLING OF CELL PHON E TOWERS THEREON IN THE BUILDING CANNOT BE ASSESSED AS INCOME FROM OTHE R SOURCES. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, AMEND OR DELETE ALL OR ANY OF THE AFORESAID GROUNDS OF APPEAL. 4. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT IN PARA 4.2 OF THE ASSESSMENT ORDER FOR T HE AY. 2013-14, IT IS NOTED BY THE AO THAT FOR ASSESSING AN I NCOME EARNED IN RESPECT OF A PROPERTY AS AN INCOME FROM H OUSE PROPERTY, THE PROPERTY IN QUESTION SHOULD BE FIT FOR H ABITATION. HE ALSO OBSERVED THAT AN OPEN PLOT/ TERRACE CANNOT BE TERMED AS HOUSE PROPERTY AS IT IS THE COMMON AMENITY FOR US E OF MEMBERS OF SOCIETY AND CANNOT BE USED FOR HABITATION. HE SUBMITTED THAT ON THIS BASIS, AO HELD THAT THE INCOME FROM LETTING OUT THE TERRACE IS NOT ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND HE TAXED THE SAME AS INCOME FROM OTHER SOURCES AND DISALLOWED THE CLAIM FOR DEDUCTION U/S. 24(A) OF THE INCOME TAX ACT (ACT) IN BO TH THE ITA NOS. 3029 & 3030/MUM/2018 : 4 : YEARS. HE SUBMITTED THAT THIS ISSUE IS SQUARELY COVERE D IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN THE CASE OF MATRU ASHISH CO-OPERATIVE HOUSING SOCIETY LTD., VS. ITO [27 TAXMANN.COM 169] (MUMBAI-TRIB). HE SUBMITTED A CO PY OF THE TRIBUNAL ORDER. 5. LD. DR FOR THE REVENUE SUPPORTED THE ORDER(S) OF T HE LD. CIT (A). 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, I REPRODUCE THE RELEVANT PARA OF THE TRIBUNALS ORDER RE NDERED IN THE CASE OF MATRU ASHISH CO-OPERATIVE HOUSING SOCIE TY LTD., VS. ITO (SUPRA), HEREIN BELOW FOR READY REFERENCE: 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE A SSESSEE IS A COOPERATIVE HOUSING SOCIETY, FILED RETURN DECLARING AN INCOME OF RS. 6,53,990/-. DURING THE COURSE OF ASSESSMENT IT WAS INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF RS. 5.50 LACS AS RENT RECEIVED FROM RELIA NCE TELECOM AND AFTER DEDUCTING AN AMOUNT OF RS.1.65 LACS BEING DE DUCTION U/S.24(A) OF THE INCOME TAX ACT, 1961(THE ACT) @ 30% FROM THE ABOVE AMOUNT, THE ASSESSEE HAS SHOWN AN AMOUNT OF RS. 3,85,000/- AS INCOME FROM HOUSE PROPERTY. ON BEING ASKED IT WAS SUBMITTE D BY THE ASSESSEE THAT SINCE THE ABOVE AMOUNT REPRESENTED RE NT RECEIVED FOR ALLOWING RELIANCE TELECOM TO USE PORTION OF THE TER RACE, THE SAME WAS RENT RECEIVED FROM LETTING OUT PROPERTY, AND HENCE, THE SAME WAS LIABLE TO BE TAXED AS INCOME FROM HOUSE PROPERTY U/ S.22 OF THE ACT AS TERRACE CONSTITUTES AN INTEGRAL PART OF THE BUILDIN G AS REFERRED TO U/S.22 OF THE ACT. HOWEVER, THE ASSESSING OFFICER F OLLOWING THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2003-04 TRE ATED THE RECEIPT OF RS. 5.50 LACS AS INCOME FROM OTHER SOURCES AND D ISALLOWED THE CLAIM OF RS.1.65 LACS U/S.24(A) OF THE ACT AND ACC ORDINGLY COMPLETED THE ASSESSMENT AT AN INCOME OF RS. 25,21,440/-, VID E ORDER DATED 22.11.2006 PASSED U/S.143(3) OF THE ACT. ON APPEAL, THE LD. CIT(A) ITA NOS. 3029 & 3030/MUM/2018 : 5 : FOR THE SAME REASONS WHILE FOLLOWING THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2003-04, UPHELD THE ADDITION MADE B Y THE ASSESSING OFFICER. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US TAKING FOLLOWING SOLE GROUND OF AP PEAL:- 1. THE CIT(A) HAS ERRED IN CONFIRMING THAT THE RENT R ECEIVED FOR ALLOWING THE USE OF TERRACE AREA UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ACCORDINGLY DISALLOWED RS. 1,65,000/- BEING 30% OF RENT RECEIVED AS EXPENSES U /S.24(A) OF THE INCOME TAX ACT, 1961. 5. AT THE TIME OF HEARING THE LD. DR SUPPORTS THE O RDER OF THE ASSESSING OFFICER AND THE LD. CIT(A). 6. HAVING CAREFULLY HEARD THE SUBMISSION OF THE LD. DR AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND THAT THE F ACTS ARE NOT IN DISPUTE. WE FURTHER FIND THAT THE ISSUE IS COVERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THE TRIBUNAL. IN THE CASE OF SHARDA CHAMBER PREMISES VS. ITO IN ITA NO.1 234/M/08 DATED 1.9.2009 FOR ASSESSMENT YEAR 2003-04 IN WHICH JM WAS ONE OF THE PARTY, ON THE SIMILAR FACTS, THE TRIBUNAL AF TER CONSIDERING THE DECISION IN ITO VS. CUFFE PARADE SAINARA PREMISES C O-OPERATIVE SOCIETY LTD. 7225/MUM/05 DATED 28TH APRIL, 2008 FOR ASSESSMENT YEAR 2002-03 AND ALSO THE DECISION IN THE CASE OF S . SOHAN VS. 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 T HE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND ME RIT IN THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN THE CASE OF M/S. DAL AMAL HOUSE COMMERCIAL COMPLEX-PREMISES CO-OPERATIVE SOCIETY LTD., THE TRI BUNAL WHILE ADMITTING THE ADDITIONAL GROUND BEING A LEGAL ISSUE HAS ALSO HELD T HAT THE LETTING OUT OF THE TERRACE, ERECTION OF ANTENNA AND INCOME DERIVED FRO M LETTING OUT HAS TO BE TAXED AS INCOME FROM HOUSE PROPERTY AND NOT AS INCOME F ROM OTHER SOURCES. THE TRIBUNAL WHILE DECIDING THE ISSUE HAS FOLLOWED THE ORDE R OF THE TRIBUNAL IN THE CASE OF M/S. CUFFE PARADE SAINARA PREMISES CO-OP. S OCIETY LTD. SUPRA. 7. IN THE ABSENCE OF ANY DISTINGUISHING FEATURE BROUG HT 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 SO URCES ASSESSED BY THE ASSESSING OFFICER AND ALSO ALLOW DEDUCTION PROVIDE D U/S.24 OF THE ACT AND ACCORDINGLY THE ADDITIONAL GROUND TAKEN BY THE ASSESS EE IS ALLOWED. ITA NOS. 3029 & 3030/MUM/2018 : 6 : RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL SU PRA, 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 DEDUCTIO N U/S.24 OF THE ACT AS AGAINST INCOME FROM OTHER SOURCES ASSESSED B Y THE ASSESSING OFFICER. WE HOLD AND ORDER ACCORDINGLY. THE GROUND TAKEN BY THE ASSESSEE IS, THEREFORE, ALLOWED. 6.1. THE ISSUE IN DISPUTE IN THAT CASE AS PER THE PARA REPRODUCED FROM THE TRIBUNALS ORDER ABOVE IS REGAR DING RENT RECEIVED FROM RELIANCE TELECOM AND IN THAT CASE ALSO, THE ASSESSEE CLAIMED A DEDUCTION U/S. 24 (A) OF RS. 1.6 5 LAKHS BEING 30% OF SUCH RENTAL AMOUNT OF RS. 5.50 LAKHS. AO DISALLOWED THE SAME BY HOLDING THAT IF INCOME IS LIABL E TO BE TAXED AS INCOME FROM OTHER SOURCES AND NOT UNDER THE H EAD INCOME FROM HOUSE PROPERTY. HE MADE DISALLOWANCE OF THE CLAIM FOR DEDUCTION U/S. 24 (A) OF THE ACT. AGGRIEVED , ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). HE DID NOT SUCCEED AND ASSESSEE AGAIN CARRIED THE MATTER BEFORE THE TRIBUNAL. THE TRIBUNAL AT PARA 6 OF ITS ORDER AS REP RODUCED ABOVE, FOLLOWED ANOTHER ORDER OF THE TRIBUNAL RENDERE D IN THE CASE OF SHARDA CHAMBERS PREMISES CO. OP. SOCIETY LTD ., VS. ITO IN ITA NO. 1234/MUM/2008, DT. 01-09-2009 AND DEC IDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND HELD THAT INCOM E FROM LETTING OUT OF THE TERRACE HAS TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY SUBJECT TO DEDUCTION U/S. 24 OF ITA NOS. 3029 & 3030/MUM/2018 : 7 : THE ACT AS AGAINST INCOME FROM OTHER SOURCES AS ASSES SED BY THE AO. SINCE IN THE PRESENT CASE, THE FACTS IN DISPUTE ARE IDENTICAL AND NO DIFFERENCE IN FACTS COULD BE POINTED OUT BY THE LD. DR OF THE REVENUE, RESPECTFULLY FOLLOWING THIS OR DER OF THE TRIBUNAL, I DECIDE THE ISSUE IN FAVOUR OF THE ASSESSE E. RESPECTIVE GROUNDS ARE ALLOWED. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF FEBRUARY, 2019 SD/- (A.K. GARODIA) /ACCOUNTANT MEMBER /MUMBAI; /DATED : 1 ST FEBRUARY, 2019 TNMM ITA NOS. 3029 & 3030/MUM/2018 : 8 : / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. # $ ( ) / THE CIT(A), MUMBAI 4. # $ / CIT, MUMBAI 5. '()*+ , #-*+#. , / DR, ITAT, MUMBAI 6. )/01 / GUARD FILE # / BY ORDER, ' //TRUE COPY// /# (DY./ASST. REGISTRAR) #-*+#., / ITAT, MUMBAI