Search Results For: 56(2)(iii)


QUERY: Mr. X has let out his residential flat to a prestigious company. As per the requirement of the company and as is customary in the area, the flat, which was not in proper condition, was required to be repaired and refurbished with modern decor. Mr. X also has to install air conditioners in all the rooms. Mr. X also had to pay one month rent as commission / brokerage to a broker who arranged the deal. Mr. X also had to pay society charges and other maintenance / contribution charges to the society. Besides, Mr. X also has to incur various administrative costs. The rent is one single amount. What amounts are deductible from the rent income in the hands of Mr. X?

Will there be any difference if:

(i) Instead of Mr. X, a company was owner with one of its objects being dealing in immovable properties?

(ii) Instead of one, say, dozen properties are let out to different persons.

(iii) In case the company is owner, the company has also to incur expenses on audit fees, ROC filing fees, director fees, etc.
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In Tube Rose Estates (P) Ltd., v. ACIT [123 ITD 498] the Delhi Tribunal has held that the brokerage payable by an assessee for renting out the premises could neither be deducted from the rent under section. 23 nor it was allowable as a deduction under section 24 of the Income-tax Act, 1961.