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2005 (4) TMI 265 - ITAT DELHI-EChargeable to tax under Income From House Property - rental income - deduction on account of commission paid to property agent - HELD THAT:- We are of the view that the rent actually paid by the tenant and accepted by the owner has to be taken as the 'annual value' of the house property for the purpose of computing income which is chargeable to income-tax under the head 'Income from house property'. For this proposition, we derive support from the decision of Hon'ble Delhi High Court in the case of CIT v. H.G. Gupta & Sons [1983 (12) TMI 54 - DELHI HIGH COURT] wherein it was held that deduction of expenditure incurred on stamp duty and registration in connection with execution of lease deed is not allowable as neither section 23 nor section 24 provides for such deduction. Explaining further, their Lordships of Delhi High Court have observed that use of the word 'namely' in section 24 shows that heads of expenditure whereof deduction can be claimed in the computation of income from house property are exhaustive. In the present case, it is observed that the rental income was received by the assessee-company directly from the tenants which constituted its income at the point when it reached or accrued to it whereas commission was paid separately to the property agents to discharge its contractual liability. In the case of Imperial Chemical Industries (India) (P.) Ltd.[1969 (2) TMI 15 - SUPREME COURT] by the learned counsel for the assessee, the Hon'ble Supreme Court has held that an obligation to apply income which has accrued or arisen or has been received amounts merely to application of such income. In the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. v. CIT[1997 (7) TMI 4 - SUPREME COURT], the Hon'ble Supreme Court has observed that the tax is attracted at the point when the income is earned and taxability of income is not dependent upon its destination or manner of its utilization. Keeping in view these decisions of Hon'ble Supreme Court, we hold that the payment of commission by the assessee-company to property agents did not amount to diversion of income by overriding title and the contentions raised by the learned counsel for the assessee in this regard are not acceptable being devoid of any merits. The commission expenditure in question was laid out for earning rental income arid since the said income admittedly was chargeable to tax under the head 'Income from house property' and not under the head 'Income from other sources', we are of the view that the same could not be allowed u/s 57. Hence, we find it difficult to accept even the alternative contention raised by the learned counsel for the assessee before us. Thus, we are of the considered opinion that the commission paid by the assessee-company to the property agent was not deductible in computing its income chargeable under the head 'Income from house property' and the Assessing Officer was fully justified in disallowing the claim of the assessee for such deduction. The impugned order of learned CIT(A) confirming the disallowance made by the Assessing Officer on this count is, therefore upheld and this appeal filed by the assessee is dismissed. In the result, the appeal of the assessee is dismissed.
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