MAKER TOWER 'F' PREMISES CO.OP. SOC. LTD., MUMBAI V. ACIT 17 (2), MUMBAI

ITA 6386/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9584 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2015-2016
• Appeal Filed On: 07-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH
• Assessee Lawyers: MAHENDRA GOHEL
• Keywords: Tax effect; Set aside
• Section: 201; 13; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI S. RIFA UR RAHMAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER IT A NO. 6386/MUM./2019 ( ASSESSMENT YEAR : 20 15 16 ) MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LTD. , MAK ER ARCADE G.D. SOMANI ROAD, MUMBAI 400 005 PAN AAAAM2065Q . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 17(2), MUMBAI . RESPONDENT ASSESSEE BY : SHRI MAHENDRA GOHEL REVENUE BY : SHRI GURBINDER SINGH DATE OF HEARING 13 . 0 5 .202 1 DATE OF ORDER 08.07.2021 O R D E R PER S. RIFAUR RAHMAN, A.M. THE CAPTIONED APPEAL IS AGAINST THE ORDER DATED 2 2 ND JULY 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) 28 , MUMBAI, FOR THE ASSESSMENT YEAR 201 5 16 . 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE EXTRACTED BELOW: 1 . COMPUTATION OF INCOME FROM RENTING OF TERRACE UNDER THE HEAD INCOME FROM OTHER SOURCES 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, 2 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LTD. THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) - 28, MUMBAI [CIT (A)] ERRED IN CONFIRMING THE ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER BY COMPUTING INCOME FROM RENTING OF TERRACE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AS AGAINST THE SAME OFFERED BY THE APPELLANT UNDER THE HEAD 'INCOME FR OM HOUSE PROPERTY' RESULTING INTO AN ADDITION FOR A SUM OF RS.3,60,000/ - . 1.2 THE LEARNED CIT (A) - 28, AND THE LEARNED ASSESSING OFFICER FAILED TO APPRECIATE THE LEGAL POSITION EMERGING FROM THE RELATED CASE LAWS ON THE ISSUE. 1.3 THE LEARNED CIT (A - 28, AND THE LEARNED ASSESSING OFFICER ERRED IN DISALLOWING CLAIM FOR DEDUCTION UNDER S ECTION 24(A) OF THE ACT, AND BRINGING THE SAME TO TAX UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. THE APPELLANT PRAYS THAT THE LEARNED ASSESSING OFFICER BE DIRECTED TO COMP UTE THE INCOME FROM RENTING OF TERRACE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' AND GRANT DEDUCTION UNDER SECTION 24(A) AND REVISE THE TOTAL INCOME OF THE APPELLANT ACCORDINGLY. 3. FACTS IN BRIEF : THE ASSESSEE, FOR THE YEAR UNDER CONSIDERATION, HAD FILE D ITS RETURN OF INCOME ON 21 ST SEPTEMBER 2015, DECLARING TOTAL INCOME AT ` 2,09,20,110 . THE ASSESSING OFFICER, ON A PERUSAL OF THE COMPUTATION OF INCOME, OBSERVED THAT THE ASSESSEE HAS LEAVE & LICENSE AGREEMENT WITH M/S. RELIANCE INFRATEL L TD. TO USE THE TERRACE OF THE BUILDING SITUATED AT MAKER TOWER - F FOR ERECTION & INSTALLATION OF ANTENNA TOWER AND RECEIVED A SUM OF ` 12,00,000 , FOR THE SAME. THE ASSESSEE DECLARED THIS INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND DEDUCTED 30% O F ` 12,00,000 , AGGREGATING TO ` 3,60,000 , FOR REPAIRS AND COLLECTION UNDER SECTION 24(A) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VIDE LETTER NO.ACIT 17(2)/ASSTT.PROCEEDING/2017 - 18 DATED 8 TH SEPTEMBER 2017 , WAS ASKE D TO SHOW CAUSE AS WHY THE USE 3 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LTD. THE TERRACE OF THE BUILDING SITUATED AT MAKER TOWER F FOR ERECTION & INSTALLATION OF ANTENNA TOWER SHOULD NOT BE TREATED AS INCOME FR O M OTHER SOURCES AND DEDUCTION UNDER SECTION 24(A) OF THE ACT SHOULD NOT BE DENIED. IN RESPO NSE, THE A . R . FOR THE ASSESSEE, VIDE LETTER DATED 18 TH SEPTEMBER 2017 , STATED THAT IT MAY BE NOTED THAT DISH ANTENNA CHARGES SHOULD BE TAXED AS INCOME FROM HOUSE PROPERTY AFTER CONSIDERING THE DEDUCTION AVAILABLE UNDER SECTION S 23 AND 24 OF THE ACT. IN SUP PORT OF HIS CONTENTION, HE RELIED UPON THE DECISION OF THE CO ORDINATE BENCH OF THIS TRIBUNAL IN MAHALAXMI SHEELA PREMISES CHS LTD., ITA NO.784, 785 & 786/MUM./2010, DATED 20 TH AUGUST 2011, AS WELL AS THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT RENDERED IN ITA NO.3183 OF 2020, DATED 16 TH AUGUST 2011. THE ASSESSING OFFICER CONSIDERED THE SUBMISSIONS OF THE ASSESSEE, HOWEVER, THE SAME WAS NOT ACCEPTABLE TO HIM, AS ACCORDING TO HIM, THE RECEIPTS DO NOT FALL UNDER THE HEAD INCOME FROM HOUSE PROPERTY, AS PER THE PROVISIONS OF SECTION 22 OF THE ACT, WHICH DEALS WITH THE INCOME FROM HOUSE PROPERTY AND THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED BY THE ORDER SO PASSED BY THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE T HE FIRST APPELLATE AUTHORITY. 4. THE LEARNED CIT(A) UPHELD THE ORDER OF THE ASSESSING OFFICER. 5. B EFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND PRAYED THAT THE 4 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LTD. ISSUE IS SQUARELY COVERED BY THE DECISION OF THE CO ORDINATE BENCH OF THIS TRIBUNAL IN MAHALAXMI SHEELA PREMISES CHS LTD., ITA NO.784, 785 & 786/MUM./2010, DATED 20 TH AUGUST 2011, AS WELL AS THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT RENDERED IN ITA NO.3183 OF 2020, DATED 16 TH AUGUST 2011. THE A.R. ACCORDINGLY PRAYED FOR ALLOWING THE CLAIM OF THE ASSESSEE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD I N THE LIGHT OF THE DECISIONS RELIED UPON . IN THIS CASE , THE SHORT ISSUE THAT WE NEED TO ADJUDICATE IS, WHETHER OR NOT THE COMPUTATION OF INCOME RECEIVED FROM RENTING OF TERRACE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AS AGAINST THE SAME OFFERED BY THE ASSESSEE UNDER T HE HEAD 'INCOME FROM HOUSE PROPERTY' RESULTING INTO AN ADDITION FOR A SUM OF RS.3,60,000 . AFTER HEARING BOTH THE PARTIES, WE FIND THAT THIS ISSUE IS NOW SETTLED BY THE DECISIONS OF THE CO ORDINATE BENCH OF THE TRIBUNAL IN MAHALAXMI SHEELA PR EMISES CHS LTD. V/S ITO, ITA NO.784, 785 & 786/MUM./2010, DATED 20 TH AUGUST 2011, WHEREIN IT HAS BEEN HELD THAT THE INCOME ON ACCOUNT OF HOARDING AND DISPLAY FROM TERRACE IS LIABLE TO BE TAXED AS INCOME FROM HOUSE PROPERTY. AS A MATTER OF CONVENIENCE, WE REPRODUCE BELOW THE RELEVANT PORTION OF THE FINDINGS 5 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LTD. OF THE CO ORDINATE BENCH IN MAHALAXMI SHEELA PREMISES CHS LTD. (SUPRA): 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 BEHA LF 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 GR OUND 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 SH E 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) DISTINGUI SHED 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, OR DER 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 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LTD. 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 DAT ED 4 TH 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 ` 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 ASSESSEES SOCIETY HAS NOT PROVIDED ANY HOUSE PROP ERTY 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 ASSESSIN G OFFICERS 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, FOR A.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 28 TH APRIL 2008, FOR A.Y. 2002 - 03 A ND 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 O UT 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 SE CTION 24 7 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LTD. 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 INCOM E TAX APPEAL NO.3183 OF 2010, VIDE JUDGMENT DATED 16 TH 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 TH E 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 BEE N 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 QU ESTION (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. 8. SINCE THE ISSUE IN HAND IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL CITED SUPRA, RESPECTFULLY FOLLOWING THE SAME, W E SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) AND ALLOW THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.07.2021 SD/ - PAVAN KUMAR GADALE JUDICIAL MEMBER SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMBAI, DATED: 08.07.2021 8 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LTD. COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER P RADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI