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2014 (1) TMI 1132 - AT - Income TaxBrokerage expenses - Held that:- Following CIT vs. H.G. Gupta & Sons [1983 (12) TMI 54 - DELHI High Court] - If a particular type of expenditure is not specifically provided to be deductable under section 23 & 24 of the I.T.Act, the same cannot be claimed as deduction out of the annual letting value observing that the provisions of section 23 & 24 of the Income Tax Act are exhaustive - The payment of maintenance charges etc. paid to the housing society is an allowable deduction on the principle that the same is in the shape of taxes and charges etc. which have a considerable bearing on the actual letting value of the property - Whereas the payment of brokerage for arranging for a lessee cannot be said to have any bearing effect on the annual letting value of the property - Decided against assessee. Professional fees – Held that:- The assessee paid amount for attending to all meetings, drafting and settling letter of intent/lease agreement etc. in respect of leasing out of the property - Neither the letting out of the property was business of the assessee nor any steps taken for letting out the property in question were related to business of the assessee - Following CIT vs. H.G. Gupta & Sons [1983 (12) TMI 54 - DELHI High Court] - The said expenditure cannot be said to be having any bearing on the annual letting value of the property - As such any expenditure incurred for payment of professional fees etc. as mentioned above cannot be said to be an allowable deduction - Decided in favour of assessee. Advise and consultation – Held that:- The said expenditure has been incurred for payment as consultation charges in relation to rain water harvesting system installation in the building - The business of the assessee has been development and sale of the property and the installation of rain water harvesting system was a part of the development activity and the consultation charges were paid in relation to installation of the said system - It can be said to be incurred in relation property development business of the assessee - The same is an allowable deduction. Era architechts – Held that:- The above expenditure has been claimed to be incurred towards interior designing work of the single screen cinema - Apart from property development business, the assessee was also in the cinema business - The said business was suspended for some time and the same has been revived during the year 2010 - The payment towards designed work of single screen cinema can be said to be towards improvement/development of the said property - The same is an allowable deduction. Expenses for valuation of property – Held that:- The said expenditure has been claimed to be incurred for getting the valuation of the property done for the purpose of its letting out - The said expenditure cannot be said to be in relation to the business of the assessee as the letting out of the property has never been the business of the assessee – The expenses are not allowable.
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