TMI Blog2015 (6) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... , these decisions will not apply in the assessee’s case. Further in the cases where payment of stamp duty has been held to be allowable will not apply also as the same is directly related in connection with the lease agreement for renting of the property. Hence, said cases and instances will not apply in the present case. Thus, in our opinion, the payment of brokerage cannot be allowed as deduction either u/s. 23 or u/s. 24. The CIT(A) has therefore, rightly confirmed the disallowance of such a payment of brokerage and we hold that no such deduction can be allowed while computing the income from house property. - Decided against assessee. - ITA No.5494/Mum/2013 - - - Dated:- 5-6-2015 - Shri B R Baskaran Shri Amit Shukla,JJ. For the Petitioner: Ms Mrugakshi K Joshi For the Respondent: Mr. Akhilendra P Yadav ORDER Per Amit Shukla, Judicial Member The aforesaid appeal has been filed by the assessee against order dated 29.04.2013 passed by the CIT(A) 7, Mumbai, for the quantum of the assessment passed u/s. 143(3) for the A.Y. 2010-11 on the following grounds of appeal: The Learned Commissioner of Income Tax (Appeals) has erred in not allowing Brokerage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke brokerage, commission, etc., for determination of annual value of the property except the taxes levied by the local authority on payment basis in respect of the said property. Accordingly, he disallowed the claim of brokerage paid by the assessee. In support, the Assessing Officer relied upon the decision of the ITAT Delhi Bench in the case of Tube Rose Estates Pvt. Ltd. Vs. ACIT (2010) [123 ITD 498] and Chandigarh Bench in the case of CIT vs. Piccadily Hotels Pvt. Ltd. [97 ITD 564]. Thus, the Assessing Officer computed the income from house property at ₹ 90,39,432/- after giving standard deduction @30% u/s. 24. 3. Before the CIT(A) same submissions were reiterated and further decisions of ITAT Mumbai Bench were relied, which has been incorporated by the CIT(A) at pages 3 and 4 of the appellate order. The learned CIT(A) confirmed the findings of the Assessing Officer on the same ground that such deduction of brokerage against income from house property has nowhere been specified either in section 23 or in section 24. Therefore, such a claim is contrary to the provisions of law. 4. Before us, the learned counsel submitted that brokerage was paid by the assessee compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B Richard Ellis South Asia Pvt. Ltd. for sourcing and securing a suitable licensee for the said office premises. The assessee had paid two months license compensation and 2% of the security deposit as professional fees/brokerage. Section 22 is the charging section of income from house property which provides that annual value of the property shall be charged to income tax. Section 23 provides for determining of annual value and section 24 provides for deductions from income from house property. The case of the assessee is that, u/s. 23(1)(b), for the purpose of determination of annual letting value of the property, envisages that the property which has been let out, then the actual rent received or receivable is to be taken as rental income. The phrase actual rent received or receivable means net of deductions and the actual rent received in the hands of the assessee. Such a plea of the assessee cannot be accepted, because what is contemplated u/s. 23 is that the annual value of the property which is let out should be the portion of rent received or receivable by the owner from the tenant/licensee. The first and foremost condition is that it should be in the nature of rent as m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the payment in respect of any other services provided by the landlord in addition to renting out of the property and rent is inclusive of consideration for such services. For instance, there may be situations where the land lord in addition to letting out the property has also provided some services such as lift facilities, services of sweeper and darwan, electricity etc., and the rent fixed includes consideration in respect of these services also. In that case, the charges payable in respect of the services provided by the landlord have to be excluded from the composite rent while computing the income from house property because under the head house property only the income from rent in respect of the bona fide use of the property can be taxed, as held by the Hon ble High Court of Calcutta in case of CIT vs. Delhi State Industrial Development (2007) 295 ITR 419 (Del). But in this case, there is no other services provided by the assessee and, therefore, inclusion of any consideration on this account in the rental value does not arise. In fact, in this case, the services have been provided by a third party to whom the brokerage is payable by the assessee and this is not include ..... X X X X Extracts X X X X X X X X Extracts X X X X
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