Brokerage for rental premises
Kishore Mehta
Dear All,
Radiant Premises Pvt. Ltd vs. ACIT (ITAT Mumbai)
S. 23(1)(b): Brokerage paid to give out premises on rent and to earn lease rent is not deductible in computing the Income from house property
The word ‘rent’ connotes a return given by the tenant or occupant of the land or corporeal hereditaments to the owner for the possession and use thereof. It is a sum agreed between the tenant and the owner to be paid at fixed intervals for the usage of such property. The phrase rent received and receivable contemplates the amount received for the enjoyment of the property and certain rights in the said property by the tenant. If there is charge directly related to the rental income or for the property without which the rights in the property cannot be enjoyed by the tenant then it can be construed as part and parcel of enjoyment of the property from where rent is received then such charges can be held to be allowable from the rent received or receivable. However, the brokerage paid to the third party has nothing to do with the rental income paid by the tenant for enjoying the property to the owner. Brokerage cannot be said to be a charge that has been created in the property for enjoying the rights and at best it is only an application of income received/receivable from rent
Kishore Mehta.
210, Saideep, Chembur Govandi Road, opp Hotel Vaishali, Chembur Station, Mumbai-400 071.
Tel : 25212048/ 5968
TelFax : 25215968
e-mail :cakisho...@gmail.com
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