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Case Law Details

Case Name : ACIT Vs. Jaikishan Shyamsunder Vaswani (ITAT Mumbai)
Appeal Number : ITA No. 3112/Mum/2016
Date of Judgement/Order : 03/01/2019
Related Assessment Year : 2010-11
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Jaikishan Shyamsunder Vaswani Vs ACIT (ITAT Mumbai)

It is noted that property situated at Flat No.72, L Block, Maker Tower, Cuffe Parade, Mumbai was actually let out to Bank of America during AY 2007-08 @ Rs.2 Lacs per month. However, this rent has drastically been reduced to Rs.25,000/- per month upon receipt of interest-free security deposit of Rs. 4 Crore from the tenant. No plausible/cogent explanation regarding drastic reduction has been placed on record. Secondly, similar addition in immediately preceding AY 2009-10 was accepted by the assessee by not preferring the second appeal and the matter had already attained finality in the preceding year. Another important factor to be noted that interest-free security deposit received by the assessee was advanced to sister concerns without any interest and no income has been reflected by the assessee against the same. The totality of the above facts lends credence to the reasoning of both the lower authorities and therefore, the conclusion that the whole exercise was a colorable device to reduce the overall tax burden, could not be said to be without any sound basis.

FULL TEXT OF THE ITAT JUDGMENT

1. Aforesaid cross-appeals for Assessment Year [AY] 2010-11 contest the order of Ld. Commissioner of Income Tax (Appeals)-28, Mumbai [CIT(A)], Appeal No. CIT(A)-28/IT-1 35/DC-1 2(2)/201 3-1 4 dated 22/02/201 6. The grounds urged by the assessee reads as under: –

1. On the facts and in the circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) erred in confirming the addition of income from House Property in respect of Flat No. 72, ‘L’Block, in Maker Tower, Cuffe Parade, Mumbai 400006 at Rs.2,00,000/- per month.

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