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2016 (6) TMI 386 - ITAT MUMBAI

2016 (6) TMI 386 - ITAT MUMBAI - TMI - Determination of perquisite value - Notional interest on deposit given by the employer with the landlord for securing the rented premises - whether is not to be treated as a perquisite? - Held that:- Admittedly, the assessee’s employer, i.e. M/s. Kotak Investment Advisors Ltd., had provided rent free accommodation to assessee for which it paid rent of ₹ 2,10,000/- and a deposit of ₹ 20,00,000/-. As per the records in Form No. 12BA, it was seen t .....

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ainable in view of the express words used in Rule 3 of the I.T. Rules, 1962 as amended w.e.f. 01.04.2001 and accordingly direct the AO to delete the addition made in this regard. - Decided in favour of assessee. - ITA No. 6591/Mum/2014 - Dated:- 3-6-2016 - SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER For the Petitioner : Appellant: Shri Himesh G. Thanawala For the Respondent : Respondent: Shri S.R. Kirtane ORDER PER JASON P. BOAZ, A.M. This appeal by the assesse .....

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39;)Rs. vide order dated 28.02.2013, wherein the income of the assessee was determined at ₹ 1,93,06,890/-. This was in view of the addition of ₹ 2,40,000/- made by the AO on the grounds that the notional interest on deposit of ₹ 20,00,000/- given by his employer to the landlord for accommodation provided by the employer to the assessee is to be considered as perquisite. On appeal, the CIT(A)-28 dismissed the assessee s appeal for A.Y. 2010-11 vide order dated 19.08.2014, holdin .....

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onor the respected Bombay High Court Judgement dated 06.09.2011, in case of CIT-26 versus Shankar Krish Nan that Notional Interest on Deposit given by employer securing rented premises should not be treated as perquisite value, therefore addition of ₹ 2,40,000/- should be deleted entirely. 3.1.2 The learned A.R. for the assessee was heard in support of the grounds raised. It was submitted that the facts of the matter are that in the period under consideration the assessee s employer had pr .....

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; 2,40,000/- as per I.T. Rul 3(A)III @12% of the deposit of the deposit of ₹ 20,00,000/- and added the same to the assessee s income. The learned A.R. contended that this addition is not sustainable in law since this very issue, on similar facts, has been considered and held in favour of the assessee by the Hon'ble Bombay High Court in the case of CIT vs. Shankar Krishnan in ITA NO. 356 of 2010 dated 06.09.2011 wherein the Hon'ble High Court has held that notional interest on depos .....

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impugned order of the authorities below. 3.3.1 We have heard the rival contentions of both the parties and perused and carefully considered the material on record, including the judicial decision cited (supra). Admittedly, the assessee s employer, i.e. M/s. Kotak Investment Advisors Ltd., had provided rent free accommodation to assessee for which it paid rent of ₹ 2,10,000/- and a deposit of ₹ 20,00,000/-. As per the records in Form No. 12BA, it was seen that the perquisite value of .....

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or the assessee is not to be treated as a perquisite. 3.3.2 In this regard, we have perused the decision of the Hon'ble Bombay High Court in the case of Shankar Krishnan in ITA No. 3516 of 2010 dated 06.09.2011 and find that the same is rendered on the very same issue on similar facts. The question for consideration by their Lordships therein was as under: - 1. Where an employer takes residential premises on rent by giving security deposit for the benefit of employees, whether the notional i .....

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