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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI N.K. BILLAIYA & SHRI AMARJIT SINGH
PER N.K. BILLAIYA, AM: This appeal by the assessee is preferred against the order of the Ld. CIT(A)-31, Mumbai dated 29.10.2010 pertaining to Assessment year 2006-07. 2. The grievance of the assessee is two fold. The first ground relates to the addition of Rs. 44 lakhs on account of deemed lease rent and the second ground relates to the addition of Rs. 1.32 lakhs being deemed interest earned by the assessee .
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The rival contentions were heard. We have given a thoughtful consideration to the submissions made by the respective representative. We have carefully gone through the orders of the authorities below and have carefully perused the documentary evidences brought on record and referred to during the course of the hearing.
Facts emerging out of the assessment order are that the assessee has purchased flats in multistoried building called Samshiba vide agreement dated 10.5.2005 for a consideration of Rs. 3.75 crores. While scrutinizing the return of income, the Assessing Officer found that the assessee has not shown any income under the head “Income from House Property” being annual let out value of the flats in Samshiba apartment vide show cause notice dated 25.11.2008, the AO asked the assessee to show cause why rent received or receivable at annual letting value of the said flat should not be taxed as per Sec. 22 & 23 of the Act for the period of 11 months i.e. May 2005 to March, 2006. 4. 1. In response to this show cause notice, the assessee vide letter dated 1.12.2008 submitted a detailed reply which read as under:
“With reference to your letter dt 25.11.2008 wherein you have given an opportunity to the Assessee to show cause as to why the Income of Rs. 44,00,000/- being leave & license rent from flat at Samshiba Apartments for the period of 11 months be added to Assessee's Income as she had purchased the flat on 10th May 2005 from Mr. Samir Bojwani & being the owner of flat, she is entitled to the Leave & License Rent of Rs. 44,00,000/-, which is liable to be charged to tax under the head Income from House Property as per provisions of section 22 & 23 of the Income Tax Act 1961. 3 To this, we would like to submit that the Assessee has purchased the flat at 'SAMSHIBA' vide Agreement dt 10th May 2005 on "Ownership Basis" from the Vendor Mr. Samir Narain Bhojwani subject to Leave & License Agreement which was executed between the Vendor & the Licensee namely Accor Radha Krishna Corporate Services Pvt. Ltd on 27th November 2004 and registered at the office of the Sub-