COMMISSIONER OF INCOME TAX Vs. HINDUSTAN TIMES LIMITED

JUDGEMENT

(1.) THE question on which a reference is sought by the CIT is whether the Tribunal was justified in allowing the assessee a deduction of Rs. 95,811 paid by it as a special commission to Orient Investment (P) Ltd. It is common ground that the commission was paid in respect of a property assessed under S. 22 of the INCOME TAX ACT, 1961. It is also common ground that the expenditure is allowable only if it falls within S. 24(1)(viii) which allows a deduction in respect of "any sum spent to collect the rents from the property, not exceeding 6 per cent of the annual value of the property". It is also common ground that the amount incurred by the assessee fell within the ceiling above mentioned.

(2.) BOTH the CIT(A) and the Tribunal have given a concurrent finding that the commission was paid in order to enable the assessee to collect the rent. The agreement between the assessee and Orient Investment (P) Ltd. was entered into in somewhat exceptional circumstances. The CIT has discussed it at length and he has pointed out the various services which were rendered by the Orient Investment (P) Ltd. as a result of which the assessee was able to get enhanced rent for the property and also able to realise it periodically without difficulty. Though counsel for the CIT contends that the payment was not related to the actual collections, it has been found that it was paid actually on the amount of licence fees received and also graduated according to the licence fee paid, whether it was in excess of Rs. 3,60 per sq. ft. or less.