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ITAT held that the cessation of liability for a Rs. 4.80 crores deposit cannot be automatically inferred from Kamat Hotels' accounting actions. The tribunal found no basis for the lower authorities' observations and determined that the liability's quantification depends on the arbitrator's award. Regarding notional rent for property used by LIHS without consideration, the tribunal rejected the Assessing Officer's computation, noting that such notional income cannot be actually applied or accumulated for trust purposes. The tribunal directed deletion of both the liability addition and notional rent calculation, emphasizing that any potential violation under section 13(1)(c) read with section 13(1)(b) would only result in denial of benefits to the extent of diverted income.
ITAT held that the cessation of liability for a Rs. 4.80 crores deposit cannot be automatically inferred from Kamat Hotels' accounting actions. The tribunal found no basis for the lower authorities' observations and determined that the liability's quantification depends on the arbitrator's award. Regarding notional rent for property used by LIHS without consideration, the tribunal rejected the Assessing Officer's computation, noting that such notional income cannot be actually applied or accumulated for trust purposes. The tribunal directed deletion of both the liability addition and notional rent calculation, emphasizing that any potential violation under section 13(1)(c) read with section 13(1)(b) would only result in denial of benefits to the extent of diverted income.
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