Shri Sameer Surendra Sinha, Ahmedabad V. The ACIT.,Circle-8(OSD), Ahmedabad

ITA 780/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9459 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 11-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J P JANGID
• Assessee Lawyers: S N DIVATIA
• Section: 14A

Judgement Text

ITA NO.780 /AHD/201 2 ASSESSM EN T Y EAR: 20 0 8 - 09 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD B BENCH, AHMEDABAD [CORAM : PRAMOD KUMAR AM AND KUL BHARAT JM] ITA NO. 780 /AHD/2012 AS SESSMENT Y EAR : 20 0 8 - 09 S AMEER SURENDRA SINHA ........ .APPELLANT 14, VAISHALI SOCIETY, NR. ASHISH HIGH SCHO OL, BODAKDEV, AHMED A BAD. [ PAN: A GSPS 5270 L ] VS. A SSISTANT COMMISSIONER OF INCOME TAX CIRCLE - 8 (OSD) , AHMEDABAD. .......... . RESPONDENT APPEARANCES BY: S.N. DIVATIA , FOR THE A PPELLANT J.P. JANGID , F OR THE RE SPONDENT DATE OF CONCLUDING THE HE ARING : FEBRUARY 11 TH , 201 6 DATE OF PRONOUNCING THE ORDER : FEBRUARY 19 TH , 201 6 O R D E R PER PRAMOD KUMAR AM : THIS APPEAL IS DIRECTED AGAINST LEARNED CIT(A) S ORDER DATED 25 TH JANUARY, 2012 FOR THE ASSESSMENT YEAR 2008 - 09. 2. ON TH E FIRST GROUND OF APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GRIEVANCE : - 1. THE LD . CIT ( A ) HAS ERR E D IN FACTS AND IN LAW BY TREATING THE INCOME AMOUNTING TO RS.1,47,588/ - FROM RENTING OF T ERRACE SPACE AS INCOME FROM OTHER SOURCES INSTEA D OF TREATING IT A S INCOME FROM HOU S E PROPERTY 3. SO FAR AS THIS GRIEVANCE OF THE ASSESSEE IS CONCERNED, RELEVANT MATERIAL FACTS ARE LIKE THIS. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ITA NO.780 /AHD/201 2 ASSESSM EN T Y EAR: 20 0 8 - 09 PAGE 2 OF 5 NOTED THAT THE ASSESSEE HAS EARNED INCOME OF RS.8,988/ - AND RS. 1,38,600/ - FROM HIRING OUT SPACE AT TERRACE FOR ANTENNA AT SHAPATH - I AND SHAPATH - II BUILDING RESPECTIVELY. ACCORDING TO THE ASSESSING OFFICER, AS THIS INCOME WAS FROM RENTAL WITH RESPECT TO T ERRACE ANTENNA, THIS INCOME WAS REQUIRED TO BE TREATED AS INCOME FROM OTHER SOURCES AND NOT INCOME FROM HOUSE PROPERTY A S CLAIMED BY T HE ASSESSEE . AGGRIEVED , ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT(A) BUT WITHOUT A NY SUCCESS. LEANED CIT( A ) CONFIRMED THE ACTION OF THE ASSESSING O FFICER BY OBSERVING AS FOLLOWS : - 2.3 DECISION: I HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND THE SUBMISSIONS GIVEN BY THE APPELLANT. THE APPELLANT HAS CLAIMED THAT IT WAS A RIGHT IN THE PROPERTY AND, THEREFORE, SHOULD FALL UNDER THE HEAD PROPERT Y INCOME. THE APPELLANT HAD RENTED TERRACE RIGHTS TO BOTH THE ABOVE COMPANIES WHO ARE PAYING MONTHLY RENT TO THE APPELLANT AND, THEREFORE, THE INCOME SHOULD FALL UNDER THE HEAD INCOME FROM HOUSE PROPERTY . THE CLAIM OF THE APPELLANT IS NOT ACCEPTABLE AS THE RIGHT FOR INSTALLING THE ANTENNA AT THE TERRACE CANNOT BE CONSIDERED AS LETTING OUT OF THE PROPERTY. THE APPELLANT HAS MERELY ALLOWED THE PERSON TO INSTALL THE ANTENNA AT THE TERRACE AND HE HAS NOT LET OUT THE TERRACE ITSELF. THEREFORE, THE CLAIM OF THE APPELLANT IS NOT ACCEPTABLE AND THE ACTION OF THE A. O. IN TREATING THE INCOME AS INCOME FROM OTHER SOURCES IS UPHELD. THE GROUND OF APPEAL IS DISMISSED. 4. THE ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE US. 5. HAVING HEARD THE RIVAL CONT ENTIONS AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE IS SQUARELY COVERED, IN FAVOUR OF THE ASSESSEE, BY A CO - ORDINATE BENCH DECISION IN THE CASE OF MANPR E ET SINGH VS. ITO [(2015) 38 SOT 426 (DEL)] WHEREIN THE T RIBUNAL HAS, INTER ALIA , OBSERVED A S FOLLOWS : - 8. LEARNED CIT(A) WAS THUS CLEARLY IN ERROR IN OBSERVING, IN THE IMPUGNED ORDER, THAT HON BLE HIGH COURT HAS HELD THAT IF THE RENT IS ONLY FOR FIXING THE HOARDING , IT CANNOT BE TREATED AS PART OF THE BUILDING, NOR COULD IT BE TRE ATED AS LAND APPURTENANT THERETO, THEREFORE SUCH INCOME WILL HAVE TO BE SEPARATELY CONSIDERED AS INCOME FROM OTHER SOURCES (EMPHASIS BY UNDERLINING SUPPLIED BY US) . AS IS CLEARLY DISCERNIBLE FROM THE EXTRACTS FROM THE OBSERVATIONS OF THEIR LORDSHIPS OF HO N BLE CALCUTTA HIGH COURT, THE RENT WAS TAKEN AS RENT FOR HOARDINGS PER SE RATHER THAN ITA NO.780 /AHD/201 2 ASSESSM EN T Y EAR: 20 0 8 - 09 PAGE 3 OF 5 RIGHTS ON THE ROOF WHERE HOARDINGS COULD BE INSTALLED OR, AS THE LEARNED CIT(A) PUTS IT, FIXED . THERE WAS A CATEGORICAL FINDING TO THAT EFFECT IN THE ORDER OF THE TRIB UNAL AS WELL AND THIS FINDING REMAINED UNCONTROVERTED BEFORE HON BLE CALCUTTA HIGH COURT AS WELL. IT WAS BASED ON THIS UNCONTROVERTED FINDING THAT HON BLE CALCUTTA HIGH COURT REACHED THE CONCLUSION THAT THE INCOME IN QUESTION IS TAXABLE AS INCOME FROM OTHE R SOURCES. THIS DECISION, THEREFORE, CANNOT EVEN BE AN AUTHORITY FOR THE PROPOSITION THAT THE INCOME FROM RENTING OUT THE ROOF FOR PLACING THE HOARDINGS CAN BE TREATED AS INCOME FROM OTHER SOURCES. QUITE TO THE CONTRARY TO THIS INTERPRETATION, THE OBSERVAT IONS MADE IN THIS DECISION UNAMBIGUOUSLY SHOW THAT WHEN IT CAN BE DEMONSTRATED, AS THEIR LORDSHIPS WANTED THE ASSESSEE TO DEMONSTRATE IN THAT CASE, THAT THE CONSIDERATION RECEIVED IS RENT FOR LETTING OUT THE ROOF RATHER THAN THE HOARDINGS, THE LEGAL POSITI ON WILL BE MATERIALLY DIFFERENT. SUCH BEING THE CORRECT POSITION, IT IS CERTAINLY STRETCHING THE THINGS A BIT TOO FAR TO SUGGEST THAT RENT FOR ROOF, FOR INSTALLATION OF MOBILE ANTENNAS, CANNOT BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY . LEARNED C IT(A) S OBSERVATIONS TO THE EFFECT THAT ON THE SAME ANALOGY, RENT FROM THE INSTALLATION OF MOBILE ANTENNAE WHICH HAS BEEN ERECTED ON THE TOP AT THE BUILDING WOULD NOT BE TAXABLE UNDER THE HEAD INCOME FROM PROPERTY AS THE RENT WAS ONLY FOR PROVIDING SPAC E FOR INSTALLATION OF THE MOBILE ANTENNAE ON THE TOP OF BUILDING, AND THE SAME CANNOT BE TREATED AS PART OF THE BUILDING NOR CAN IT BE TREATED AS LAND APPURTENANT THERETO IS A CLASSIC CASE OF FALLACIOUS LOGIC. ONCE LEARNED CIT(A) AGREES THAT RENT WAS ONL Y FOR PROVIDING SPACE FOR INSTALLATION OF THE MOBILE ANTENNA , THERE IS NO OCCASION TO CONSIDER WHETHER ANTENNA WILL BE A PART OF A BUILDING OR LAND APPURTENANT THERETO AS THE TRUE TEST IS WHETHER SUCH A SPACE, AS HAS BEEN RENTED OUT, IS PART OF THE BUILDI NG OR LAND APPURTENANT THERETO. THE RENT IS NOT FOR THE ANTENNA BUT FOR THE SPACE FOR INSTALLATION OF ANTENNA. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE RENT IS FOR THE ANTENNA, AND, THEREFORE, IT IS WHOLLY IRRELEVANT WHETHER ANTENNA IS PART OF THE BUILDING OR LAND APPURTENANT THERETO. WHAT IS RELEVANT IS THE SPACE WHICH HAS BEEN RENTED OUT AND, THEREFORE, AS LONG AS THE SPACE, WHICH HAS BEEN RENTED OUT, IS PART OF THE BUILDING, THE RENT IS REQUIRED TO BE TREATED AS INCOME FROM HOUSE PROPERTY . LEARNED COUNSEL FOR THE ASSESSEE HAS FILED COPIES OF LEAVES AND LICENCE AGREEMENTS WITH THE BHARTI AIRTEL LIMITED AND THE IDEA CELLULAR LIMITED. IN BOTH OF THESE AGREEMENTS, IT IS SPECIFICALLY MENTIONED THAT THE RENT IS FOR USE OF ROOF AND TERRACE AREA ( NOT MORE THAN 900 SQ FT IN THE CASE OF BHARTI AIRTEL LTD AND APPROX 800 SQ FT IN THE CASE OF IDEA CELLULAR LIMITED). THE AGREEMENT WITH BHARTI AIRTEL LTD MENTIONS THAT THE ASSESSEE PERMITS THE LICENCES TO INSTALL, ESTABLISH, MAINTAIN AND WORK ON THE LICEN CED PREMISES, INTER ALIA, INCLUDING THE FOLLOWING (A) TRANSMISSION TOWER/POLE, WITH MULTIPLE ANTENNAS; (B) PRE - FABRICATED EQUIPMENT SHELTER; (C) D G SET UPTO 25 KVA: AND (D) TWO EARTHING CONNECTION AND LAYING OF OTHER CABLES TO GROUND AN ONE LIGHTNING AR RESTOR, NECESSARY CABLING AND CONNECTING TO EACH ANTENNA/ EQUIPMENT, AND SPACE FOR INSTALLATION OF ELECTRICITY METER AND POWER CONNECTIVITY ETC . SIMILARLY, AGREEMENT WITH IDEA CELLULAR LTD, INTER ALIA, STATES THAT THE ASSESSEE GIVES PERMISSION AND LICENCE TO USE AND OCCUPY A PORTION ADMEASURING APPROX. 800 SQ FT TERRACE AND ROOF AREA FOR INSTALLATION OF PREFABRICATED TEMPORARY ASSEMBLED AIR CONDITIONED SHELTER, TOWER/ANTENNA POLES AND SUCH OTHER EQUIPMENT AS MAY BE NECESSARY . ALL THESE INSTALLATIONS ARE TO BE DONE BY THE RELATED COMPANIES AND THE OBLIGATION OF THE ASSESSEE DOES NOT EXTEND BEYOND PERMITTING USE OF SPACE FOR SUCH INSTALLATIONS. IT IS ITA NO.780 /AHD/201 2 ASSESSM EN T Y EAR: 20 0 8 - 09 PAGE 4 OF 5 THUS CLEAR THAT THE RENT IS FOR SPACE TO HOST THE ANTENNAS AND NOT FOR THE ANTENNAS. AS LONG AS THE RENT IS FOR THE SPACE, TERRACE AND ROOF SPACE IN THIS CASE AND WHICH SPACE IS CERTAINLY A PART OF THE BUILDING, THE RENT CAN ONLY BE TAXED AS INCOME FROM HOUSE PROPERTY . 9. IN VIEW OF THE ABOVE DISCUSSIONS, AND AS THE RENT RECEIVED BY THE ASSESSEE FOR USE OF S PACE, BY BHARTI AIRTEL LIMITED AND IDEA CELLULAR LIMITED, IN A BUILDING, OR PART THEREOF, OWNED BY THE ASSESSEE, IN OUR CONSIDERED VIEW, THE RENT SO RECEIVED MUST BE TAKEN INTO ACCOUNT IN COMPUTATION OF ANNUAL VALUE TO BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY . ACCORDINGLY, AS LEARNED COUNSEL FOR THE ASSESSEE RIGHTLY CONTENDS, THE DEDUCTION UNDER SECTION 24(A) IS ADMISSIBLE ON THE FACTS OF THE PRESENT CASE. WE, THEREFORE, REVERSE THE STAND OF THE AUTHORITIES BELOW AND UPHOLD THE STAND OF THE ASSE SSEE. THE ASSESSING OFFICER IS, ACCORDINGLY, DIRECTED TO DELETE THE IMPUGNED DISALLOWANCE. 10. LEARNED COUNSEL FOR THE ASSESSEE HAS TAKEN PAINS TO COMPILE SEVERAL UNREPORTED AND REPORTED JUDICIAL PRECEDENTS IN SUPPORT OF THE STAND TAKEN BY THE ASSESSEE, AND WITH A VIEW TO DISTINGUISH HON BLE CALCUTTA HIGH COURT S DECISION IN THE CASE OF MUKERJEE ESTATES (SUPRA), BUT, HAVING REACHED OUR CONCLUSIONS ON THE FIRST PRINCIPLES AND NOT HAVING FOUND ANY JUDICIAL PRECEDENT COMING IN THE WAY OF THESE CONCLUSIONS, W E SEE NO NEED TO DEAL WITH THIS METICULOUS WORK. WE LEAVE IT AT THAT. 6. AS FOR THE DECISION OF ANOTHER CO - ORDINATE BENCH, IN THE C A SE OF JMD REALTORS PVT . LTD . V S . DCIT (ITA NO.5346/DEL/2011; ORDER DATED 29.02.2012), WE FIND THAT IT DEALT WITH LETTING O UT OF ANTENNA/TOWERS ON ROOF OF BUILDING A ND NOT THE LETTING OUT OF ROOF FOR THE PURPOSE OF THE ANTENNA. AS STATED IN THE STATEMENT OF FACTS BEFORE THE LD . CIT(A) AND WHICH REMAIN UNCONTROVERTED BEFORE US, THE CONSIDERATION IS FOR USE OF ROOF RIGHTS ON WH ICH ANTENNA IS TO BE INSTALLED BY THE HIRER. IN THE PRESENT CASE, A S LEARNED COUNSEL HAS STATED AT THE BAR, THE INCOME IS FOR GIVING RIGHTS FOR INSTALLATION OF ANTENNA ON THE ROOF. THE INCOME IS THUS PROXIMATELY FROM THE USE OF ROOF WHICH IS ESSENTIALLY A PART OF THE BUILDING ITSELF. THAT ASPECT OF THE MATTER HAS BEEN DISCUSSED AT LENGTH IN THE CA SE OF MANPREET SINGH (SUPRA) AN D THE RELEVANT EXTRACTS ARE REPRODUCED ABOVE. IN VIEW OF THESE DISCUSSIONS , WE UPHOLD THE CONTENTION OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO TREAT THE SAID AS INCOME FROM HOUSE PROPERTY. ITA NO.780 /AHD/201 2 ASSESSM EN T Y EAR: 20 0 8 - 09 PAGE 5 OF 5 7. GROUND NO.1 IS THUS ALLOWED. 8. IN GROUND NO.2, THE ASSESSEE HAS RAISED THE FOLLOWING GRIEVANCE: - 2 THE LD . CIT(A) HAS ERRE D IN LAW AND IN FACTS IN DISALLOWING THE EXPENSES MOUNTING TO RS.10,98,004/ - BY APPLYING SECTION 14A OF THE I NCOME T AX A CT. 9. LEANED COUNSEL FAIRLY ACCEPTS THAT THE ISSUE IS COVERED , AGAINST THE ASS E SS E E, BY S PECIAL BENCH DECISION IN THE CASE OF VISH N U ANANT MAHAJAN VS. A CIT [(2012) 137 ITD 189 (AHD . SB)]. HE , HOWEVER, WISHES TO KEEP THE MATTER ALIVE. 10. GROUND NO.2 IS THUS DISMISSED. 11. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY 19 TH DAY OF FEBRUARY, 2016. SD/ - SD/ - KUL BHARAT PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: THE 19 TH DAY OF FEBRUARY , 2016 . PBN/* COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASS ISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD