ACIT Vs Instant Traders Pvt. Ltd. (ITAT Mumbai)
ITAT Deletes ALV Addition Because Revenue Failed to Prove Rent Suppression; Separate Amenities Charges Cannot Be Added to Rental Income Without Evidence of Tax Avoidance: ITAT; Interest Deduction Under Section 24(b) Allowed Because Loans Were Used for Property Acquisition; Section 14A Disallowance Deleted Because Assessee Earned No Exempt Income During the Year; ITAT Upholds Deletion of Additions Because Assessment Was Based on Presumptions Rather Than Evidence; Market Rent Cannot Replace Actual Rent Unless Lease Arrangement Is Proven Sham: ITAT; Registered Lease Agreements Prevail Over Notional Rent Estimates in ALV Determination: ITAT; Commercial Realty Structure With Separate Rent and Amenities Agreements Upheld by ITAT; Revenue Cannot Recharacterise Genuine Rental Transactions Based on Market Perception Alone: ITAT.
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, dismissed a batch of appeals filed by the Revenue against orders of the Commissioner of Income Tax (Appeals) [CIT(A)] relating to Assessment Years 2013-14, 2014-15, 2015-16 and 2017-18. Since all appeals involved common issues arising from substantially similar facts, the Tribunal disposed of them through a consolidated order, treating Assessment Year 2013-14 as the lead year.
The Revenue challenged the CIT(A)’s deletion of additions and disallowances made by the Assessing Officer (AO) on three issues: enhancement of Annual Letting Value (ALV) under Section 23(1)(a), disallowance of interest expenditure incurred on borrowed funds used for acquiring commercial properties, and disallowance under Section 14A read with Rule 8D despite the assessee having earned no exempt income during the relevant years.
