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2017 (6) TMI 916 - AT - Income TaxIncome from a let out house property - Disallowance of brokerage from the annual letting value of the let out property - Held that:- As decided in Commissioner Of Income-Tax, Delhi I Versus HG. Gupta And Sons [1983 (12) TMI 54 - DELHI High Court] the expenses incurred in providing the proper stamp paper in case of a lease or agreement to lease is by virtue of the provisions contained in section 23 of the Indian Stamp Act, 1899, and is on the lessee or intended lessee, in the absence of an agreement to the contrary. It may be for this reason, that the Legislature did not include such expenses in the permissible deductions under section 23 or section 24. If a particular type of expenditure is not specifically provided to be deductible, deduction, therefore, cannot be claimed from out of the annual value. Neither section 23 nor section 24 provides for the deduction of the expenses incurred towards the stamp duty or registration charges in respect of the lease. If the view of the Tribunal is accepted that the expenditure incurred has to be deducted from the gross rent in order to arrive at the reasonable annual letting value, then the annual letting value would be different in the first year as compared to the subsequent years, The expenditure incurred on a lease for a period of 5 years towards the stamp duty and registration charges is only in the first year. The annual value of any property is deemed to be the same for which the property might reasonably be expected to let from year to year. It is a notional income to be gathered from what a hypothetical tenant would pay which is to be objectively ascertained on a reasonable basis. The annual value cannot be left to fluctuate when the lease is for a period of 5 years. Answer the reference in the negative, i.e., in favour of the department and against the assessee.
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