Dismissing the appeal of the revenue the Court held that ;once interest on interest free security deposits received by assessee from tenant was offered to tax as income from other sources, adding of notional interest on interest free security deposit to determine ‘Annual letting value’ of property would amount to double taxation .( AY. 2004 -05 to 2007 -08)
PCIT v. Karia Can Co. Ltd. (2018) 257 Taxman 189 (Bom) ( HC)
S. 23 : Income from house property – Annual value – Interest free security deposit – Interest offered as income from other sources-Notional interest on interest free deposit cannot be considered to determine annual letting value of property- Notional addition would amount to double taxation .[ S.22, 23(1)(b) ]