rental income from car parking and Tower at roof

[satishcgarg]

A commercial  building is developed and fully sold by a builder. The builder doesnot have any inventory in the books of account . what is the treatment in the income tax Act in the follwoing circumtances:-
1. When car parking charges is collecting from the buyer over and above the space sold to them for  uses for additional car parking and the builder does not have inventory in his books of account. can this rent is taxable under the head income from house property.
2.Similary for tower rent  collected form the telecon company, rental  income is chargeable under the head income fromhouse property.
in both the circumatances please quote the judgement.

[ashutosh majumdar]

For income to be chargeable under the head "house property", there must first of all be "property" of which the assessee is an "owner". In your case, there is no property. The income is really incidental to the business of construction and so it will be chargeable as normal business profits. 

[satishcgarg]

but roof does not have any cost  and no roof right has been sold to buyers. in  that case roof right is with comany having notional value. in that circumtances, rental income from towers is be taxable under the head income from house property.

[camanojgupta]

In Matru Ashish Co-Operative Housing Society Ltd. v. ITO (2011) 42 (II) ITCL 372 (Mum 'B'-Trib) it was held that Income from letting out of terrace to telecom company for establishing telecom towers was assessable as income from house property.
Similar decision was rendered in Sharda Chamber Premises v. ITO ITA No. 1234/M/08, dt. 1-9-2009 and ITO v. Cuffe Parade Sainara Premises Co-operative Society Ltd. 7225/Mum/05, dt. 28th April, 2008.
CIT v. Bajaj Bhavan Owners Premises Co. Op. Society Ltd., Income Tax Appeal No.3183 of 2010 (Bom.)(High Court)

CA MANOJ GUPTA
JODHPUR
09828510543

[ashutosh majumdar]

In Matru Ashish Co-Operative Housing Society Ltd. v. ITO (2011) 42 (II) ITCL 372 (Mum 'B'-Trib) it was held that Income from letting out of terrace to telecom company for establishing telecom towers was assessable as income from house property.
Similar decision was rendered in Sharda Chamber Premises v. ITO ITA No. 1234/M/08, dt. 1-9-2009 and ITO v. Cuffe Parade Sainara Premises Co-operative Society Ltd. 7225/Mum/05, dt. 28th April, 2008.
CIT v. Bajaj Bhavan Owners Premises Co. Op. Society Ltd., Income Tax Appeal No.3183 of 2010 (Bom.)(High Court)

CA MANOJ GUPTA
JODHPUR
09828510543

But Sir, are these cases where the assessee does not own the property?  The Querist says that he has no property to let but is still collecting monies towards "parking" and "tower".

[vsaiyar]

The rent collect must be for use of some asset.  Either that asset is commercial or residential.  It could be owned or rented.  If the property is owned and it is immovable property then that income should be treated as income from house property.  However the same immovable property being a commercial asset, the rental income received therefore could be treated as business income.  If the property is not owned, the rental income received is to be treated as INCOME FROM OTHER SOURCES. 

[srinivasan]

As you say that there are no assets , th eparking fees received is for the services rendered including the service of the parking attendent, marking of the parking areas , giving parking slips, having a barrier at the 4entrance etc, it shoud be taken as income from other sources and these expenses can be claimed.