TaxTMI 
TaxTMI 
2021 (6) TMI 135
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.... Tax Act, 1961 (hereinafter referred to as Act) dated 30/11/2017 by the ld. Asst. Commissioner of Income Tax 3(1)(2), Mumbai (hereinafter referred to as ld. AO). 1.1. With the consent of both the parties, the appeal for A.Y.2014-15 is taken as the lead case and the decision rendered thereon would apply with equal force for A.Y.2015-16 also, in view of identical facts, except with variance in figures. 2. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in disallowing the rent paid to Smt. Shweta Rasiwasia amounting to Rs. 28,89,000/-. The interconnected issue involved thereon is whether the ld. CIT(A) was justified in disallowing the interest proportionately u/s.36(1)(iii) in respect of security dep....
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.... agreement is for a period of 55 months i.e. from 01/11/2011 to 31/05/2016. We find that the ld. AO observed that since the bungalow is owned by director's wife, there is all possibility of utilisation of the same for their personal use and accordingly, proceeded to disallow the entire expenditure of Rs. 28,89,000/- towards rent as not for the purpose of business. 3.1. For the said property, the assessee had also paid security deposit of Rs. 91,50,000/- to the wife of director. The ld. AO observed that since the property per se is not utilised for the purpose of business of the assessee, there is no business expediency to pay security deposit of Rs. 91.50 lakhs to the wife of director to the said property. The ld. AO observed that since th....
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....e had been retained by the wife of director. Hence, there is no question of any personal usage of the property being debited in the books of the assessee company. The ld. CIT(A) however, disagreed with the contentions of the assessee and upheld the action of the ld. AO. 3.3. We find that assessee had taken property on lease for the purpose of its business. The said property is situated at Lonavala. The said property belongs to the wife of director of the assessee company. The property has been taken on lease based on a registered lease agreement entered into with the wife of director of the assessee company. We find that Smt. Shweta Rasiwasia had retained some portion of the property for her personal use and had leased out the remaining p....