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TMI Blog2017 (10) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 480000/- as against legitimate claim of deduction Under Section 24 (a) of the Income Tax Act and assess the Income as 'Income from other Sources' as against the '"Income form House Property' as per Return of income filed by the Assessee. The Id CIT(A) failed to appreciate that renting out land appurtenant to the buildings owned by the Society for the purpose of erecting hoardings shall be in the nature of the 'Income from House Property' and not as 'Income from Other Sources'. 2. Both the lower authorities patently erred in law and on facts in holding that rent income from letting out land 'appurtenant' to Building owned by the Society is in the nature of 'Income form House Property' and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices (P) Limited are in the back yard of some of the buildings owned by the members of the assessee society for their own residence. The core issue is whether the receipts in the hands of the assessee society can be taxed under the head income from house property. Section 22 of the Act reds as '22. The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income tax, shall be chargeable to income tax under the head "income from house property' Thus, it is clear that unless the property owned by the assessee is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived from Selvel Media Services (P) Limited for number of hoardings erected on common land owned by the society as income from house property. The Assessing Officer held that since the appellant society did not own the residential building, it cannot let out the residential building owned by the members and, therefore, the rent derived from the hoardings cannot be termed as having been derived from the land appurtenant thereto. The appellant has claimed that it was the owner of the land and all the residential units. The members have only been allotted the flats for use and they are not the absolute owners. Further, the hoardings have been put up in the backyard of some of the residential units which was the society land, and therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the authorities below 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 the Hon'ble Karnataka High Court in the case of CN Ananthram vs. ACIT [judgement dated 10.10.2014 in ITA No.1012 of 2008), which is equally valid in the present context." When the legislature has used the word 'or' which means the word building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utta High Court concluded as follows: ".......Therefore, considering the finding of the Tribunal that the assessee has let out the hoarding, these are neither part of the building nor land appurtenant thereto. Therefore, permitting some companies to display their boards on hoardings cannot be taken as income from the house property as hoardings cannot be taken as part of the building" 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 treated as land appurtenant thereto, therefore such income will have to be separately considered as income from other sources (Emp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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