Vummidi Barath, CHENNAI V. ITO, CHENNAI

ITA 914/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6406 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: B JAISHEILA

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL , SMC A BENCH, CHENNAI . , BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.914/MDS/2017 ( / ASSESSMENT YEAR: 2009-10) SHRI VUMMIDI BARATH, NO.20, OLD NO.23/2, MYLAI RANGANATHAN STREET, T.NAGAR, CHENNAI 600 017. VS THE INCOME TAX OFFICER, NON CORPORATE WARD 2(2), CHENNAI 600 034. PAN: ADNPV6940J ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MS. B. JAISHEILA, CA /RESPONDENT BY : SHRI SUPRIYOPAL, JCIT /DATE OF HEARING : 14.06.2017 ! /DATE OF PRONOUNCEMENT : 17.08.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS)-2, CHENNAI DATED 28.02.2017 IN ITA NO.167/CIT(A)-2/201 3-14 FOR THE ASSESSMENT YEAR 2009-10 PASSED U/S.250(6) R.W.S .143(3) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN HIS APPEAL, HOWEVER THE CRUXES OF THE ISSUES ARE AS FOLLOWS:- 2 ITA NO.914/MDS/2017 I. THE LD.CIT(A) HAS ERRED IN UPHOLDING THE ORDER O F THE LD.AO, WHO HAD DISALLOWED RS.1,36,416/- TOWARDS LEA VE TRAVEL ALLOWANCE (LTC). II. THE LD.CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF THE LD.AO, WHO HAD ASSESSED THE LEASE RENT OF RS.2,59,2 00/- UNDER THE HEAD INCOME FROM OTHER SOURCES INSTEAD OF INCOME FROM HOUSE PROPERTY AND THEREBY DENIED THE BENEFIT OF DEDUCTION U/S.24 OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE ASSE SSMENT YEAR 2009-10 ELECTRONICALLY ON 06.02.2010, ADMITTING TO TAL INCOME OF RS.4,18,760/-. INITIALLY THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY THE CASE WAS SELECTED FOR SC RUTINY UNDER CASS AND FINALLY ORDER U/S.143(3) OF THE ACT WAS PA SSED ON 29.12.2011, WHEREIN THE LD.AO MADE ADDITIONS TOWARD S MEDICAL ALLOWANCE ALONG WITH THE OTHER ADDITIONS MENTIONED HEREIN ABOVE. 4. GROUND NO. 2(I) : DISALLOWANCE TOWARDS LEAVE TRAVEL ALLOWANCE:- 3 ITA NO.914/MDS/2017 DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDI NGS, IT WAS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAD REC EIVED LEAVE TRAVEL CONCESSION OF RS.1,70,520/- WITH RESPE CT TO HIMSELF, FATHER, MOTHER AND BROTHER. SINCE, SECTIO N 10(5) OF THE ACT PROVIDED THAT THE LTC CAN BE CLAIMED AGAINST TH E PARENTS, BROTHERS AND SISTERS OF THE ASSESSEE ONLY IF THEY A RE WHOLLY DEPENDENT ON THE ASSESSEE AND IN THE CASE OF THE AS SESSEE IT WAS FOUND THAT THEY WERE NOT DEPENDENT ON THE ASSES SEE, THE LD.AO ALLOWED ONLY 1/5 TH OF THE TOTAL AMOUNT OF RS.1,70,520/- RECEIVED AS LTC WHICH WORKED TO RS.34,104/- AND DIS ALLOWED THE BALANCE AMOUNT OF RS.1,36,416/- AND ADDED TO THE IN COME OF THE ASSESSEE. ON APPEAL ALSO THE LD.CIT(A) CONFIRMED T HE ORDER OF THE LD.AO AGREEING WITH HER VIEW. 4.1 BEFORE US, THE LD.AR ARGUED STATING THAT THE AS SESSEES RELATIVES WERE WHOLLY DEPENDENT ON THE ASSESSEE AND THEREFORE THE REVENUE HAD GROSSLY DONE INJUSTICE BY DISALLOWI NG THE CLAIM OF THE ASSESSEE. THE LD.DR ON THE OTHER HAND RELIE D ON THE ORDERS OF THE REVENUE AUTHORITIES AND FURTHER PLEAD ED BY STATING THAT THE ASSESSEE HAD NOT BROUGHT ANYTHING ON RECOR D TO PROVE THAT THE ASSESSEES RELATIVES WERE DEPENDENT ON HIM . 4 ITA NO.914/MDS/2017 4.2 I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSEE HAD CATEGORICALLY STATED BEFORE THE LD. REVENUE AUTHORI TIES THAT HIS PARENTS AND SIBLINGS WERE WHOLLY DEPENDENT ON HIM. THUS THE ONUS HAS SHIFTED ON THE REVENUE TO PROVE OTHERWISE. HOWEVER, THE REVENUE HAS NOT BOTHERED TO VERIFY THE CLAIM OF THE ASSESSEE BUT SIMPLY MADE ADDITION UNDER THE PREMISES THAT TH E ASSESSEES PARENTS AND SIBLINGS ARE NOT WHOLLY DEPENDENT ON TH E ASSESSEE. CONSIDERING THE FACTS AND CIRCUMSTANCE OF THE CASE, IM OF THE VIEW THAT THE ADDITION MADE BY THE REVENUE AUTHORIT IES ARE NOT WARRANTED AND THEREFORE I HEREBY DIRECT THE LD.AO T O DELETE THE ADDITION MADE TOWARDS LEAVE TRAVEL ALLOWANCE OF RS. 1,36,416/-. 5. GROUND NO.2(II) : TREATING INCOME FROM HOUSE PROPERTY AS INCOME FROM OTHER SOURCES:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT W AS OBSERVED BY THE LD.AO THAT THE ASSESSEE HAD DISCLOS ED CERTAIN INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. ON FURTHER VERIFICATION, IT WAS FOUND THAT THE INCOME DISCLOSE D UNDER THE HEAD INCOME FROM HOUSE PROPERTY WAS LEASE RENTALS RECEIVED 5 ITA NO.914/MDS/2017 FROM TELEPHONE COMPANIES FOR ERECTING TOWER IN THE ROOF OF THE BUILDING BELONGING TO THE ASSESSEE. THE LD.AO TAKI NG CUE FROM THE DECISION OF THE HONBLE CALCUTTA HIGH COURT WHE REIN IT WAS HELD THAT THE INCOME ARISING FROM LEASING OF ROOF OF THE BUILDING FOR ERECTING HOARDINGS WILL BE ASSESSED UNDER THE H EAD INCOME FROM OTHER SOURCE, OPINED, IN THE CASE OF THE ASS ESSEE ALSO THE SAME ANALOGY WILL FOLLOW. ACCORDINGLY, THE LD.AO C OMPLETED THE ASSESSMENT BY ASSESSING THE RENTAL INCOME OF THE AS SESSEE UNDER THE HEAD INCOME FROM OTHER SOURCE. ON APPE AL, THE LD.CIT(A) ALSO CONCURRED WITH THE VIEW OF THE LD.AO AND UPHELD HER ORDER BY OBSERVING AS UNDER:- THE FINDING OF THE TRIBUNAL IN THE CITED' CASE WAS THAT THE ASSESSEE HAS LET OUT THE HOARDINGS, WHICH ARE NEITH ER PART OF THE BUILDING NOR THE LAND APPURTENANT THERETO, AND THE SAME HAS BEEN UPHELD BY THE HON'BLE HIGH COURT. THE FACT S OF THE APPELLANT'S CASE ARE SLIGHTLY DIFFERENT BECAUSE HER E, A PORTION OF THE TERRACE HAS BEEN LEASED OUT. NEVERTHELESS, IT SHOULD BE NOTED THAT -THE BUILDING BELONGING TO THE APPELLANT 'IS A COMMERCIAL CUM RESIDENTIAL COMP LEX. HENCE, THE INCOME FROM LETTING OUT A SMALL PORTION OF THE TERRACE FOR 'PUTTING UP OF ANTENNA POLE AT THE ROOF TOP/TOP STOREY FOR TRANSMISSION PURPOSE AS REQUIRED FOR CEL LULAR SERVICES', CANNOT BE CONSTRUED.VAS 'INCOME FROM HOU SE PROPERTY', FROM THIS ANGLE, THE STAND TAKEN BY THE ASSESSING OFFICER' THAT THE LEASE OF ROOF DOES' NOT CONTRIBUT E TO THE ANNUAL VALUE OF PROPERTY CONSISTING OF BUILDINGS OR 'LAND APPURTENANT THERETO, WITHIN THE MEANING OF SEC, 22 OF THE ACT, IS LOGICAL AND 6 ITA NO.914/MDS/2017 TENABLE. AT THE SAME TIME, THE LEASE RENT ALSO DOES NOT STRICTLY FALL- UNDER 'INCOME FROM BUSINESS' OF THE APPELLANT . AS OUTLINED IN THE 'LAW OF INCOME TAX' BY SHRI SAMP ATH IVENGAR, 'WHERE A RECEIPT WHICH DOES NOT FALL STRIC TLY UNDER THE HEAD INCOME FROM PROPERTY, BUT AT THE SAME TIME , SUCH RECEIPT IS NOT INCOME FROM BUSINESS, IT HAS NECESSA RILY TO BE ASSESSED AS INCOME FROM OTHER SOURCES'. IN CONCLUSION, THE ASSESSING OFFICER WAS JUSTIFIED IN TREATING THE LEASE RENT FROM LETTING OUT OF THE ROOF FOR ERE CTION OF THE TELECOMMUNICATION TOWER, AS INCOME FROM OTHER SOUR CES. THE SAME IS HENCE UPHELD. 5.1 BEFORE US, THE LD.AR PRODUCED THE LEASE RENTAL AGREEMENT DATED 27.12.2000 AND ARGUED STATING THAT THE ASSESS EE HAD NOT ONLY LEASED OUT THE TERRACE FOR ERECTING TOWERS BUT HAD ALSO LEASED OUT A ROOM IN THE TERRACE OF 120 SQ.FT. THE LD.AR FURTHER RELIED IN THE DECISION OF THE DELHI BENCH OF THE TR IBUNAL IN THE CASE MANPREET SINGH V. ITO REPORTED IN 38 ITR (TRIB ) 0055 (DELHI), WHEREIN ON THE IDENTICAL ISSUE IT WAS HELD THAT SUCH INCOME SHOULD BE ASSESSED UNDER THE HEAD INCOME FR OM HOUSE PROPERTY. HENCE, IT WAS PLEADED THAT IN THE CASE OF THE ASSESSEE ALSO THE LEASE RENTAL RECEIVED FROM RENTIN G THE TERRACE ALONG WITH THE ROOM ON THE TERRACE SHOULD BE ASSESS ED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE LD.DR VEHEM ENTLY 7 ITA NO.914/MDS/2017 ARGUED IN SUPPORT OF THE ORDERS OF THE LD.REVENUE A UTHORITIES AND REQUESTED FOR CONFIRMING THE SAME. 5.2 I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. THE LEASE AGREE MENT ENTERED BY THE ASSESSEE WITH M/S. RPG CELLULAR SERVICES LTD DATED 27.12.2000 SPECIFIES THE SCHEDULE OF PROPERTY LET O UT AS UNDER: SCHEDULE A : PART OF THE PREMISES IN THE COMMERCIA L CUM RESIDENTIAL COMPLEX KNOWN AS BBC VILLA, SITUATED AT OLD DOOR NO.33, PRAKASAM SALAI, BROADWAY, CHENNAI 600 108, HAVING A COVERED ROOM SPACE OF APPROXIMATELY 120 SQ .FT. AT THE TERRACE, OPEN SPACE IN THE TERRACE MEASURING 20 0 SQ.FT. AND 120 SQ.FT. FOR INSTALLING THE GENERATOR. FROM THE ABOVE IT IS EVIDENT THAT THE ASSESSEE HAD NOT ONLY RENTED OUT THE TERRACE BUT ALSO 120 SQ.FT. OF COVER ED SPACE. FURTHER, THE DELHI BENCHES OF THE TRIBUNAL IN THE D ECISION CITED SUPRA HAS CATEGORICALLY HELD AS FOLLOWS: AS LONG AS THE RENT WAS 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 PR OPERTY. IN VIEW OF THE ABOVE DISCUSSIONS, AND AS THE RENT RECE IVED BY THE ASSESSEE FOR USE OF SPACE, BY BHARTI AIRTEL LIMIMTE D, IN A BUILDING, OR PART THEREOF, OWNED BY THE ASSESSEE, I T WAS VIEWED THAT THE RENT SO RECEIVED MUST BE TAKEN INTO ACCOUN T IN COMPUTATION OF ANNUAL VALUE TO BE TAXED UNDER THE H EAD INCOME FROM HOUSE PROPERTY. ACCORDINGLY, AS LEAR NED COUNSEL FOR THE ASSESSEE RIGHTLY CONTENDS, THE DEDU CTION UNDER 8 ITA NO.914/MDS/2017 SECTION 24(A) WAS ADMISSIBLE ON THE FACTS OF THE PR ESENT CASE. WE, THEREFORE, REVERSE THE STAND OF THE AUTHORITIES BELOW AND UPHOLD THE STAND OF THE ASSESSEE. THE ASSESSING OF FICER WAS ACCORDINGLY, DIRECTED TO DELETE THE IMPUGNED DISALL OWANCE. IN THE RESULT, THE APPEAL WAS ALLOWED. SINCE THE FACTS OF THE CASE OF THE ASSESSEE IS IDENTICAL TO THE CASE DECIDED BY THE DELHI BENCH OF THE TRIBUNAL, FO LLOWING THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL, I HERE BY DIRECT THE LD.AO TO TREAT THE LEASE RENT RECEIVED BY THE ASSES SEE FOR LETTING OUT THE TERRACE ALONG WITH THE COVERED SPACE AS IN COME FROM HOUSE PROPERTY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON THE 17 TH AUGUST , 2017. SD/- ( . ) (A. MOHAN ALANKAMONY) / ACCOUNTANT MEMBER '# /CHENNAI, $% /DATED 17 TH AUGUST, 2017 JR % '( )( /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. , ( )/CIT(A) 4. , /CIT 5. (-. / /DR 6. .0 /GF