Tribunal held that, since assessee had paid lease rent advance to its MD and as per Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 rental premium would be equivalent to 3 months monthly rent. S.30 of the said Act exempts certain type of buildings as enumerated therein. Therefore, AO should reconsider facts in the light of the provisions of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. Lease rent is reasonable or not the matter was remitted back to AO. (AY. 2013-14, 2014-15, 2015-16)
Lalithaa Jewellery Mart (P.) Ltd. v. ACIT (2019) 178 ITD 503 / 73 ITR 532/ 182 DTR 337 / 201 TTJ 1123 (Chennai)(Trib.)
S. 36(1)(iii) : Interest on borrowed capital–Rental premium equivalent to 3 months monthly rent-lease rent–Excessive or un reasonable-Matter remanded to AO for reconsideration. [S. 40A(2), Tamil Nadu Buildings (Lease and Rent Control) Act, 1960.]