South Mumbai flat owner’s low rent quote is tax evasion
An attempt by a Cuffe Parade property owner to reduce the burden of income tax by declaring rent as low as Rs 25,000 has been dismissed by the Income tax Appellate Tribunal (ITAT). The man rented out the posh property to a bank.
ITAT upheld the department’s view that it was an income tax reduction device and also the addition of income of Rs 2 lakh per month as rent from the flat.
JaikishanVaswani, a non-resident, received an interest-free security deposit of Rs 4 crore from Bank of America and reflected 25,000 as monthly rent during 2009-10, the year for which the matter was heard by ITAT. In an earlier year, the bank had paid him Rs 2 lakh per month as rent.
The I-T department held that Vaswani was compensated for loss of rent by way of an interest-free security deposit from the tenant. It was merely an I-T reduction device. Also, the deposit was advanced interest-free to family members. Thus, no income was reflected against the deposit.