The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that the income from mobile companies for letting out the terrace space for fixing and operating antennas needed for cellular operation is taxable under income from house property.
The assessee in the instant case is a co-operative society filed its return of income by declaring an amount as rental income received from the cellular company as income from house property and the Assessee claimed such rental income from mobile towers for deduction under Section 24(a) of the Income Tax Act.
The Assessing Officer denied the claim for deduction by holding that terrace not comes under house property and the annual letting value of the terrace cannot be calculated and concluded that such income comes under income from other sources.
The Assessee maintained that he let out the roof space for installation of mobile towers and such income should be allowed as deduction.
Aggrieved assessee carried the matter before Commissioner (A) wherein it was held that the assessee was receiving a compensation for providing such facilities and as per the terms of agreement mobile companies denied the right of the tenant or any other type of tenancy. Accordingly, the authority sustained the decision of Assessing Officer.
When the matter brought before the Tribunal by Assessee, the counsel reiterated the submissions made before and also reminded that earlier years the same Assessing Officer never came up with such controversy.
The Assessee also added that as per the rule of consistency the income should be treated as income from house property.
The Single Judicial Member, Saktijit Dey held that “the terrace of the building cannot be considered as distinct and separate but certainly is a part of the house property. Therefore, letting–out space on the terrace of the house property for installation and operation of mobile tower / antenna certainly amounts to letting–out a part of the house property itself.”
Accordingly, the bench allowed the appeal of Assessee and declared that the income received by Assessee from the cellular company for letting out of terrace or roof space for fixing antennas has to be treated as income from house property and also eligible for deduction under section 24(a) of the Act.
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