Assessee invested in a project with a builder which was cancelled due to non-receipt of necessary permissions from Government, builder refused to return money due to which assessee had to take services of group of brokers.   Assessee paid a brokerage of certain amount for securing refund of entire money invested by him in project. Refund of money included two components, namely, principal amount and interest component. Assessee claimed deduction of brokerage under section 57(iii). Assessing Officer disallowed a portion of brokerage paid by assessee towards principal amount.CIT(A) sustained the disallowance. On appeal the Tribunal held that  payment of brokerage was a lumpsum payment made by assessee in terms of memorandum of understanding where there was no bifurcation or split of this expenditure relating to recovery of principal and recovery of interest, both of which were due to be received from builder by assessee, nor it was linked on a percentage basis depending upon quantum of recovery out of total due. Expenditure incurred by assessee was for sole purpose of recovering amount due to him from builder and assessee had no option except to incur expenditure in order to make possible recovery of amount including earning of income in form of interest on principal amount.  Expense incurred is  neither in nature of capital expenditure nor in nature of personal expenses of assessee. Accordingly the  proportionate disallowance of brokerage expenses is  not justified. (AY. 2015-16)