TMI Blog2014 (1) TMI 1726X X X X Extracts X X X X X X X X Extracts X X X X ..... onstrate as to how any aid could be derived from Explanation 1(a) to Section 23(1) of the Act. Any expense by way of brokerage or commission paid by owner to the broker in such circumstances cannot be reduced to determine annual rent received or receivable by the landlord. Once this is so, equally the plea of amount of brokerage paid to have overriding title over rent cannot be accepted. We are, not inclined to concur with the analogy on which the assessee has set up its case, especially when a particular type of expenditure is not specifically provided to be deductible, deduction cannot be claimed from it. We find no ground to differ with the view taken by the Tribunal while upholding the order of Assessing Authority. We, therefore, answer the question against the assessee and in favour of the revenue. - ITA No. 348 of 2005 - - - Dated:- 16-1-2014 - MR. AJAY KUMAR MITTAL AND MRS. ANITA CHAUDHRY Mr. Pankaj Jain, Advocate and Ms. Divya Jain, Advocate for the appellant Mrs. Urvashi Dhugga, Advocate for the respondent JUDGEMENT ANITA CHAUDHRY, J. 1. The instant appeal filed under Section 260-A of the Income Tax Act, 1961 (for brevity, the 'Act&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chandigarh (in short, the CIT(A)] and reiterated stand taken before the Assessing Authority. This time, its argument was accepted by the CIT(A) and vide order dated 21.3.2001 the commission of `16,54,000/- paid to the property agents was held to be a charge on the rent and it was ordered to be deleted. 6. Dis-satisfied with the same, Revenue-respondent filed an appeal before the Tribunal, which differed with the view taken by the CIT(A) and held that the amount of commission paid by the assessee cannot be deducted from the income of the assessee. Consequently, while setting aside the order of CIT(A), the Tribunal restored that of the Assessing Authority, leading to the filing of the instant appeal. 7. We have heard the learned counsel for the appellant as well as for the revenue and have perused the paper-book carefully. 8. The argument of learned counsel for the appellantassessee is that the rent received or receivable was expected to be one which would be after the deduction of this commission or brokerage. Reference has been made to the Explanation 1(a) to Section 23 (1) of the Act which existed at the relevant time. According to the learned counsel for the assessee-ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid provisions, we find that there is no express provision allowing any expenditure, brokerage or commission to be deducted in determining the annual letting value. A formula has been enshrined in Section 23 and a combined reading of clauses (a) and (b) would lead to an inference about the words used i.e. actual rent received or receivable . Thereafter deduction is allowed under Section 24 of the Act. The statute does not empower the assessing authority or the assessee to add anything to the provisions where the words used in the statute are plain, precise and unambiguous. Neither Section 23 nor Section 24, which are exhaustive, provides for the deduction of the commission paid to the broker or the agent while letting out the property. Furthermore, the learned counsel for the appellant was unable to demonstrate as to how any aid could be derived from Explanation 1(a) to Section 23(1) of the Act. The letting out of property with the assistance of broker at an annual rent received or receivable is one which the tenant has agreed to pay to the landlord. Any expense by way of brokerage or commission paid by owner to the broker in such circumstances cannot be reduced to determine a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 'actual rent received or receivable' have been put in clause (b) and to infer that actual rent means net rent after allowance of expenditure in connection with rent will lead to only absurd conclusion contrary to the object of legislature. What is not expressly provided in the statute should not be thrust in own inference. More so, that statute does not empower the assessing authority or the assessee either to add or subtract anything from ALV. In the case of CIT v. Gwalior Commercial Co. Ltd. 141 ITR 930 (Cal), it was held that no account of expenditure incurred in connection with air-conditioning, furniture, etc. should be added to the annual value conversely, it can be inferred that ALV is not to be disturbed which is coming out as a result of computation, as per formula u/s 23. Also the plea of the ld AR regarding overriding title cannot be accepted as no obligation has been cast on the assessee to pay brokerage. Brokerage is one time expenditure for procuring the tenant. It is upto the assessee whether he needs the services of a broker or not. There is a difference between an amount which a person is obliged to pay out of his income and an amount which by the natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecifically provided to be deductible, deduction Therefore cannot be claimed from out of the annual value. Neither s. 23 nor s. 24 provides for the deduction of the expenses incurred towards stamp duty or registration charges in respect of the lease. 14. In the case of Aravali Engineers (P) Ltd. Vs. CIT Anr. (2011) 49 DTR 68 (P H), the question raised was whether the brokerage paid by the assessee was an admissible expenditure. This Court, while referring to provisions contained in Section 24 of the Act, answered it in negative by observing that the brokerage paid was an independent transaction envisaging payment to the broker and, thus, is not a permissible deduction. It was observed as under:- As regards question (iii), learned counsel for the assessee submits that rent to the extent of brokerage paid having never been received by the assessee, the assessee was not liable to include the said rent in the income. This submission cannot be accepted. Rent admittedly was payable to the assessee and brokerage was an independent transaction envisaging payment to the broker. Where ever deductions out of income from property are permissible, the same have been specified in Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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