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If AO finds actual rent received is less than the fair market rent because of the abnormally high interest-free security deposit, he can adjust it
Case Law Details
- Case Name
- Tivoli Investment and Trading Co Vs. ACIT (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 1992- 93 and 1993- 94)
- Courts
- All ITAT, ITAT Mumbai
Tivoli Investment and Trading Co Vs. ACIT (ITAT Mumbai)- the municipal value or standard rent is not binding on the AO but is a guiding factor for determining the reasonable rent expected to be fetched by the property. If the AO finds that the actual rent received is less than the fair market rent because of the abnormally high interest-free security deposit, he can undertake necessary exercise in that behalf. However, the notional interest on interest free security cannot be taken as determinative factor to arrive at fair rent.
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCHES, ‘F’, MU...
