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2022 (7) TMI 635 - AT - Income TaxExemption u/s 11 - claim not admissible for the reason that the property of the appellant trust was used by an excluded person at a rent much lesser than the market rent - assessee is registered as a charitable organisation with DIT (Exemption), Mumbai under section 12A of the Act and also with Charity Commissioner, Mumbai - HELD THAT:- In the present case, it has not been denied that the entire building is under use and occupation of statutory tenants whose tenancies are protected under the Rent Control Act and the trust is only eligible to the standard rent from the statutory tenants. Thus, any comparison in respect of the rent received by the assessee can only be made with the rent charged to other tenants, who are also statutory tenants, of that building - As pertinent to note that rent charged to Drishti Advertising Pvt. Ltd. was at the rate of Rs. 2.40 per square feet for an area of about 1000 sq. ft. On the other hand, M/s Bullworker Pvt. Ltd. was paying rent at the rate of Rs. 2.06 per square feet for an area of about 4440 sq. ft. The area given on rent to M/s Bullworker Pvt. Ltd. was much more than the area given on rent to Drishti Advertising Pvt. Ltd, vide agreement dated 20/01/2010, and, therefore, the same justifies the difference in the amount of rent received from the aforesaid 2 entities. In addition to above, it is evident from the record that lower authorities did not take into consideration the amount of premium of Rs. 41 lakh paid by Drishti Advertising Pvt. Ltd. in respect of the aforesaid tenancy, over and above the agreed rent, and only considered the rent paid by Drishti Advertising Pvt. Ltd. While determining the rent of any property / premises, area / location / access / amenities, inter-alia, are taken into consideration. In the present case, it has not been denied that the about 1000 square feet office space on the balance of 13th floor, which was given on rent to Drishti Advertising Pvt. Ltd. had access only through the premises of Drishti Advertising Pvt. Ltd. Further, Revenue has also not denied the claim of assessee that the trust office and records were continued to be maintained from the office of Drishti Advertising Pvt. Ltd. As regards the submission of learned DR that market rate determined by the stamp duty authority are higher, it is pertinent to note that dispute in the present case is in relation to rent paid to the assessee trust and not in respect of any sale consideration. In subsequent assessment years (i.e. 2011-12, 2012-13, 2013-14 and 2014-15), wherein also the rent was received from Drishti Advertising Pvt Ltd, return filed by the assessee trust was accepted vide order passed under section 143(3) and exemption under section 11 of the Act was granted. Thus, assessing officer as well as learned CIT(A) were not justified in denying relief to the assessee under section 11, inter-alia, in respect of rent received from Drishti Advertising Pvt. Ltd. Accordingly, ground raised in assessee’s appeal is allowed.
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