News Update

US Presidential Poll: Tall promises by Hopefuls elbow economy closer to tax-doom-loop!Sourav Ganguly goes to Police against cyberbullyingYadav calls for development of sustainable, Inclusive low-carbon transport systemsFed lives up to global expectations; cuts interest rate by 0.5% - first cut in last 4 yearsMandaviya chairs meeting to provide Social Security to Gig and Platform WorkersCus - Import of Areca Nuts - Department did not follow procedure laid down by CBEC for verification or testing/re-testing, to establish true origin of goods; Nuts imported from Sri Lanka otherwise meet requirements for duty-free import under Notfn No 26/2000-Cus: CESTATCAQM announces revised GRAP schedule for Delhi-NCRChina to be on top of agenda at Quad meeting: White HouseCus - No proper evidence is found towards Customs Officer's involvement in fraud, the allegation that appellant has actively colluded with Customs officials cannot legally sustain, penalty imposed on appellant also cannot sustain: CESTATIndia's position is of a 'Vishwa Bandhu' in global world order: CDS Gen Anil ChauhanST - The contracts being composite in nature and demand having been raised under Construction of Residential Complex Services, demand of service tax cannot sustain for the period after 01.07.2010 also: CESTATGovt organises 'FAME's Success in Transforming India's EV Landscape: From Vision to Reality'Death toll rises to 21 in second wave of blasts in Lebanon - it was Walkie-Talkie after pagerI-T - Miscellaneous income such as commission, discount charges, sale of wastages and diesel sales are to be treated as income derived from industrial undertaking: HCGermany halts exports of weapons to IsraelI-T - If any statute has been enacted, there cannot be insertion of any word beyond the contents of the statute: HCI-T - Contributions to PF/ESI paid before the due date u/s 139(1) of the Act are allowable as deduction: ITATBaltimore Bridge collapse: US seeks USD 100 mn compensation from Singapore-based ship ownerI-T - No license is granted under Income tax Act to misuse presumptive scheme of taxation and camouflage undisclosed income from unexplained sources under guise of turnover/gross receipt: ITATI-T - If no return of income is filed by tax-payer, then appeal can only be admitted by CIT (A) only when tax-payer has paid advance tax which was payable by him: ITATFaux cybercrime platforms busted in global operations; 51 arrested by EuropolI-T - Dismissal of assessee's appeal in limine by CIT(A), without going into merits of issues, solely due to non-appearance of assessee, is unsustainable, being in direct contravention of Section 250(6): ITATI-T - CIT(A) has powers co-terminus with those of the AO and is permitted under law to make own inquiry or direct AO to inquire into the matter, in case of assessee's absence : ITATIMF pauses Mission to Moscow after Kyiv protestsCabinet okays National Centre of Excellence for Animation, Visual Effects & GamingCabinet accepts recommendations of High-Level Committee on Simultaneous ElectionsCabinet gave approval for CHANDRAYAAN-4 MissionIncome tax collections till Sept 15 up by 16%After Moon and Mars, India sights science goals on VenusCabinet approves Pradhan Mantri Janjatiya Unnat Gram AbhiyanISRO to develop launch reusable vehicle with high payloadJapan, France to ink military pact by year-endFM holds 2nd review meeting on Capex for Ministry of RailwaysCyber fraud - posing as CBI officer - Railway staffer loses Rs 9 lakhGlobal Renewable Energy Meet: Investment commitments of Rs 32.45 lakh Cr poured: JoshiProvisional Attachment - Precaution, Persecution, Penury?Dak Ghar Niryat Kendra expands export services with automated IGST Refund facilityThe Delay Dynamics
 
I-T - Rent received for permitting 'hoarding' inside vacant premises of a housing society, are equally eligible annual letting value, so as to claim Section 24 deduction: ITAT

By TIOL News Service

AHEMDABAD, OCT 20, 2017: THE ISSUE BEFORE THE TRIBUNAL IS - Whether consideration received by housing cooperative society, for having given rights to have play hoardings in its complex, forms part of annual letting value, and hence taxable as income from house property. YES is the answer.

Facts of the case:

The Assessee, a cooperative housing society, had received Rs.16,00,000/- from M/s Selvel Media Services Pvt. Ltd. during subject year, in respect of hoarding rent. These hoardings, as was the claim of Assessee, were built on common land owned by the society. The assessee treated the hoarding rent receipts as income taxable under the head "income from house property", and, accordingly claimed deduction u/s 24(a) @ 30% of the annual value. The AO however, declined this claim by observing that "these hoardings were erected in the ground adjacent to satellite Road and there was no building nearby. Meaning thereby that the land on which there hoardings were erected could not be termed as 'land appurtenant thereto". The AO further observed that these hoardings erected by the said M/s Selvel Media Services (P) Limited were in the back yard of some of the buildings owned by the members of the assessee society for their own residence. On appeal, the CIT(A) confirmed the action of AO, by observing that since the Assessee society did not own the residential building, it could not let out residential building owned by the members and, therefore, the rent derived from the hoardings could not be termed as having been derived from the land appurtenant thereto.

ITAT held that,

++ the counsel for Assessee rightly pointed out that the Assessee Society is a tenement co-operative housing society, in which ownership of the land and building vests in the society itself, and not the member of society. The very foundation of stand taken by the authorities is thus legally unsustainable. Coming to the connotations of "land appurtenant thereto" in the expression 'building or land appurtenant thereto', it does not mean that land should be used as an integral part of the building as a unit. The assessee in the present case is owner of entire set of housing units, which can be collectively referred to as housing complex, and, the vacant land in this complex is thus essentially an integral part of the housing complex. As observed by Karnataka High Court in the case of CN Ananthram vs. ACIT, which is equally valid in the present context, "When the legislature has used the word 'or' which means the word buildings or land appurtenant thereto should be understood disjunctively having regard to the context in which it is used, it cannot be read as 'and' as clearly, therefore, land being appurtenant to the building is sufficient; it need not be integral part of the building itself. In any case, having seen pictures of hoardings in question, this court is satisfied that land on which hoarding rights were given is appurtenant to the building and cannot be viewed on standalone basis;

++ in the present case also, the consideration received by the assessee is for the right to install the hoarding rather than rent for hoarding installed by the assessee. In view of the above discussions, the income earned by assessee, in consideration of having given rights to have play hoardings, are taxable as income from house property. Accordingly, deduction u/s 24(a) was indeed admissible in the present case.

(See 2017-TIOL-1433-ITAT-AHM)


POST YOUR COMMENTS
   

TIOL Tube Latest

TIOL Tube brings you an interview with former US Secretary of Treasury, Mr. Larry Summers who was recently in Delhi.

AR not Afar by SK Rahman



Shri Ram Nath Kovind, Hon'ble 14th President of India, addressing the gathering at TIOL Special Awards event.