In a case it was held that the terrace is certainly a part of the building. The rental income received from renting such terrace for installation of mobile antenna shall be treated as Income from House Property and thus deduction u/s 24(a) is available.   

Facts of the case:

The assessee, an individual received rental income of Rs. 2,91,723 from Bharti Airtel Limited and Idea Cellular Limited for renting out his terrace for installation of mobile antenna. The assessee showed the said income under Income from House Property. He also claimed a deduction @30% under section 24(a) from the rental income so received.

While scrutiny proceeding, the Asessing Officer rejected the claim for deduction. The Assessing Officer stated that income from installation of antenna on terrace shall be taxed under Income from Other Source and thus, there is no question of deduction under section 24(a). therefore the Assessing Officer added back Rs. 87,516 to income of the assessee.

Aggrieved by the decision of the Assessing Officer, assessee appealed to Commissioner (Appeals) [CIT(A)]. CIT (A) took the view of High Court of Calcutta in case of Mukherjee State Pvt Ltd. In this case it was held that if the rent is only for fixing the hoarding, it cannot be treated as part of the building, nor could it be treated as land appurtenant thereto, therefore such income will have to be separately considered as income from other sources. On the same analogy the CIT(A) held that rent from installation of mobile antennae erected on the terrace would not be taxable under the head “Income from House Property”, as the same could not be treated as part of the building nor be treated as land appurtenant thereto. Thus, the order of AO was upheld.

The assessee appealed to the Tribunal.

It was held that:

The judgement of Mukherjee State Pvt Ltd was misplaced as there assessee had let out the hoardings and not the terrace of the building. The argument was whether the space i.e. terrace rented out is a part of the building or land appurtenant thereto. On finding it was cleared that the rent was not for he antenna. The rent received was for letting out the space for the installation of antenna. The view of AO was irrelevant whether antenna was part of the building or land appurtenant thereto. What is to be seen is whether space rented was part of the building or not.

While discussions with the cellular companies, it was cleared that the rent paid by them was for using the terrace of the assessee and not for the mobile antenna. Therefore, as the rent received was for the terrace which is a part of the building,  the rent received for the same shall be necessarily be taxed under Income from House Property.

Thus, assessee’s appeal was upheld by the Tribunal. The said rent was considered as receipt under Houe Property and deduction under section 24(a) was also allowed to the assessee.

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