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of <h1>Tribunal disallows interest and brokerage deductions for lease/sale expenses under Income Tax Act</h1> <h3>M/s. Scaffold Properties Pvt. Ltd. Versus The Assistant Commissioner of Income Tax</h3> The Tribunal upheld the disallowance of interest under section 14A and brokerage/commission paid for lease/sale of space. The disallowance of interest was ... - Issues involved: Disallowance of interest u/s. 14A and disallowance of brokerage and commission paid for lease and sale of space.Disallowance of interest u/s. 14A: The appeal concerned the disallowance of interest amounting to `.19,61,446/- u/s. 14A of the Act. The Tribunal set aside the issue for reconsideration by the Assessing Officer in light of the decision in the case of Godrej & Boyce Manufacturing Company Ltd. vs. DCIT.Disallowance of brokerage and commission: The issue revolved around the disallowance of `.33,80,328/- being brokerage and commission paid for lease and sale of space. The Assessing Officer denied the deduction, stating that section 24 of the Act does not permit such payments as deductions. The CIT(A) upheld the disallowance, rejecting the plea to reduce the amount from the annual letting value computed u/s. 23 of the Income Tax Act.Judicial reasoning: The Tribunal considered precedents and legal provisions to decide the matter. Referring to the decision in the case of Township Real Estate Developers (India) Pvt. Ltd., the Tribunal held that deductions can only be allowed as provided under a particular head of income. It was noted that sec. 24 specifies deductions allowable for income from house property, and expenses like brokerage and commission are not covered. Rulings from the Hon'ble Delhi High Court and the Hon'ble Punjab and Haryana High Court were cited to support the decision against allowing such expenses as deductions.Conclusion: The Tribunal decided the issue against the assessee and in favor of the Revenue, following the decisions of the Hon'ble Delhi High Court and the Hon'ble Punjab and Haryana High Court. The appeal was partly allowed for statistical purposes.
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