1990 (9) TMI 10

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....) of the Income-tax Act, 1961, for the assessment year 1967-68, the following question of law has been referred to this court : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the commission paid to the broker in order to let out a house or any portion of it at a fair rent was an admissible deduction as collection charges within th....

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....000 be deleted by observing as under: "The expenditure to collect rents would include salary of an employee engaged for the purpose and/or commission paid to a broker in order to let out a house or any portion of it at a fair rent. Moreover, there is no dispute about the fact that even after inclusion of this amount, the collection charges remained within the statutory limit of six per cent. ....

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.... 24(1)(viii). There also the amount incurred was within the ceiling. His contention is that so long as the expenditure is within the limit, irrespective of the nature of the expenditure, such expenditure should be allowed. We have considered the rival contentions. Section 24(1)(viii) provides that the income chargeable under the head "Income from house property" shall be computed after making, ....

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....incurred but clause (viii) fixes a ceiling of six per cent. of the annual value of the property. Usually, collection charges are allowed in computing the income from the house property so long as such expenditure is intimately connected with the collection. The nature and character of the expenditure will determine whether such expenditure would come within the purview of collection, charges. In o....