HARMONIA CONSULTANTPVT LTD,DELHI vs. DCIT CENTRAL CIRCLE, FARIDABAD

ITA 6452/DEL/2025Status: DisposedITAT Delhi24 July 2026AY 2021-228 pages
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What were the facts?

The assessee received a substantial interest-free security deposit for a property rented out at a low monthly rent. The Assessing Officer (AO) added notional interest on this security deposit as deemed rental income. The Commissioner (Appeals) dismissed the assessee's appeals.

What did the Tribunal hold?

The Tribunal held that notional interest on interest-free security deposits cannot be treated as part of rental income, following jurisdictional High Court precedents. Therefore, the addition made by the AO was deleted.

What were the issues?

Whether notional interest on interest-free security deposit can be added as rental income. Whether the transfer of jurisdiction order was valid.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 250,Section 127,Section 246A,Section 124(3),Section 23(1),Section 24

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “A” BENCHES, NEW DELHI

Before: SHRI SUDHIR KUMAR & SHRI MANISH AGARWAL

PER MANISH AGARWAL, A.M.: The captioned appeals are filed by the assessee against the order, dated 11.08.2025 passed by Ld. Commissioner of Income Tax (Appeals)-3, Gurgaon [in short ‘ld. CIT(A)’] u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of two separate assessment orders, both dated 04.01.2024 passed u/s 147 r.w.s. 143(3) of the Act pertaining to Assessment Years 2020-21 & 2021-22 respectively.

2.

Both the appeals are having commo

The order continues below.

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