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WHICH HEAD OF INCOME

Saurabh Toshniwal (ca final) (2358 Points)

14 September 2010

suppose a person is residing in his house & he is having only one house

a telecom company install a tower on the roof of his house in which he residing at rs. 30000 p.m.

now under which head of income this income will be shown

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32 Replies

V CHANDRA SEKARA RAJU (CA FINAL) (908 Points)
Replied 14 September 2010

Income from other sources...

1 Like

Balram Begari (Accountant) (122 Points)
Replied 14 September 2010

Dear Saurabh,

Yes Income from Other Source , becuase Terrace or Roof word not included in definition under "Income from house property" Hence

You have take under Income from Other Source.

2 Like

Saurabh Toshniwal (ca final) (2358 Points)
Replied 14 September 2010

ok...........thanks

Max Payne (employed) (2569 Points)
Replied 14 September 2010

Please bother to check if he has let out his roof, or the company is compensating him for installing the tower.

Income from HP includes income from a part of building let out.

CA.G.Muguntha Narayanan (Internal Auditor at TVS Motors) (2195 Points)
Replied 14 September 2010

Dear Saurabi,

It has to be taxed under IHP Only. Reason for the same is that roof is an independant portion. Assume a small family is residing in the roof for a rent of Rs.2000, would it be advisable to take the income to IFOS. IF THERE IS A HOARDING ON THE ROOF, INCOME FROM THE SAID HOARDING MUST BE TAXED UNDER IFOS.(PLS REFER MUKHERJI ESTATE(P) LTD VS CIT case). REASON BEING THAT RENT IS GIVEN ONLY FOR THE HOARDING AND NOT FOR THE ROOF.

But in ur case, the whole roof must be let out to the telecom provider for constructing tower. So it has to be taxed under IHP

3 Like

CA Shiv (Business Controller) (2987 Points)
Replied 14 September 2010

It will be treated as Income from Other sources only....

Sunshine (Helping All) (10575 Points)
Replied 14 September 2010

IOS...

Manoj BG (Tax Professional and in Service) (1795 Points)
Replied 14 September 2010

DEAR ALL,

DEFINATELY INCOME FROM HOUSE PROPERTY.

WHENEVER THE QUESTION OF TAXABILITY UNDER WHICH HEAD IS CONCERNED, ONE THING MUST BE KEPT IN MIND THAT INCOME FROM OTHER SOURCES IS A RESIDUARY HEAD OF INCOME AND ANY INCOME NOT TAXABLE UNDER ANY OTHER HEADS OF INCOME THAT ONLY WOULD BE TAXABLE UNDER THA HEAD INCOME FROM OTHER SOURCES. THUS GIVEN CASE MUST HAVE TO BE EXAMINE FROM POINT OF VIEW OF HOUSE PROPERTY INCOME. SINCE ALL THE CONDITIONS FOR TAXABILITY UNDER IHP IS AVAILABLE IN THE CASE. I.E. PROPERTY OWNED BY THE ASSESSEE, IT MUST NOT USED BY ASSESSEE FOPR HIS PERSONAL USE, AND PROPERTY CONSIST OF LAND AND BUILDING OPPORTUNENT THERETO.

THERE IS NO PRE CONDITION ABOUT THE SPECIFIC USE OF PROPERTY LET OUT. THUS, THE PROPERTY MAY BE LET OUT FOR EITHER RESIDENTIAL PURPOSE OR OTHER, IT MAY NOT HAVE ANY IMPACT ON TAXABILITY UNDER WHICH HEAD OF INCOME. A TELECOM CO. INSTALLS TOWER ON TH ROOF OF RESIDENTIAL HOUSE OF ASSESSEE IS NOTHING BUT A LETTING OF A PART OF HOUSE I.E. ROOF TO TELECOM CO. FOR THEIR COMMERCIAL REASON. THUS, FROM ALL THE MATTERS PLACED ABOVE, THE GIVEN INCOME WOULD GET TAXABLE UNDER THE INCOME FROM HOUSE PROPERTY.

REGARDS,

MANOJ

1 Like

M .K. Jha (CA Final) (484 Points)
Replied 14 September 2010

The Reason of Ca Narayanan is sufficient to explain that It must be Taxable under the head of "INCOME FROM HOUSE PROPERTY"

Abhijit (CA final Student) (214 Points)
Replied 14 September 2010

Only the Annual value of a house property consisting of a Building and land appurtenant thereto is Taxable as IHP, but the receipt in this case can't be considered Annual Value related to a HP, so there is no other way but to consider this revenue receipt as IOS.