Only 1/25th of security deposit collected during year held liable for taxation.
Only 1/25th of security deposit collected during year held liable for taxation.
"Assessee received refundable security deposit to be repaid to its members without interest. AO in assessment, held 60% of total security deposit is to be treated as income & added sum to returned income of assessee for year under consideration. On appeal CIT(A) partly allowed it, holding that only 1/25th of security deposit collected during year would alone be liable for taxation during relevant financial year. ITAT held disallowance justified."
Facts in Brief:
1. Assessee had received the refundable security deposit which are to be repaid to its members after 25 years without interest.
2. AO in assessment, held that 60% of the total security deposit is to be treated as income and added a sum to the returned income of the assessee for the year under consideration.
3. On appeal CIT(A) partly allowed the appeal of the assessee by holding that only 1/25th of the security deposit collected during the year would alone be liable for taxation during the relevant financial year.
On appeal ITAT held,
4. Disallowance of Rs.1,44,869/- by applying the provisions of section 14A (of Income Tax Act, 1961) is justified and in accordance with law.
Case Reference - Income Tax Appellate Tribunal - Ahmedabad Gulmohar Greens Golf & Country ... vs Assessee .
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