TMI Blog2001 (7) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... ome under the other heads for the assessment years 1976-77, 1977-78 and 1978-79 ?" The reference relates to three assessment years, The assessee claimed to have paid Rs. 13,211, Rs. 22,159 and Rs. 18,018 by way of interest. On this basis, it was claimed that there was loss in the income from house property. The assessee claimed that this loss had to be set off against the income derived from business in respect of the three assessment years. The claim was disallowed by the assessing authority. The appeal filed by the assessee was accepted by the Appellate Assistant Commissioner. However, the Tribunal having accepted the assessee's claim, the Commissioner of Income-tax had filed three reference applications under section 256(1) of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 22 Section 24 provides for the permissible deductions on account of repairs, payment of premium, ground rent, etc., etc. It has been specifically provided that "where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital" can also be deducted from the income. The provision for various other deductions has also been made. Section 71 permits the assessee to set off the loss "from one head against income from another". On a harmonious reading of the abovenoted provisions, we find that the view taken by the Appellate Assistant Commissioner which has been affirmed by the Tribunal, is correct. Mr. Sawhney contends that under section 23, it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income ? In our view, section 24 clearly contemplates the deduction of interest from the income. Still further, section 71 postulates the setting off of this amount from the other income. The provisions of a statute have to be harmoniously construed. This rule is equally applicable to a taxing statute. In fact, a liability to pay can be foisted on the assessee only when it is clearly made out from the express provisions of the Act. Not otherwise. While making the reference, the Tribunal has referred to the case of K. K. Dhanda (HUF). Where a reference was made to this court. The matter was considered. The judgment is reported in [1989] 178 ITR 602 (P H). The view taken by the Tribunal was affirmed and the reference was answered in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as specially stated therein and, therefore, it could not affect the deductions referred to in section 24. Nor is there any reason to restrict the deduction only to the extent of the income from the property and not beyond that. In the light of this set up, the proviso to sub-section (1) of section 23 shall be read, interpreted and understood as relating to the determination of the annual value and, therefore, that portion which stated that the income in respect of any residential unit referred to in clause (a) or clause (b) 'is in no case a loss' shall be related only to the determination of the annual value with reference to the main part of sub-section (1) of section 23 and not for the purposes of admissibility of the total amount of dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as for instance, interest paid on borrowed capital for purposes of constructing the residential building. With a view to removing any controversy or doubt in the matter, the above quoted words have been omitted from the aforesaid second proviso. This would secure that the deduction admissible to the assessee under the provisions of section 24 of the Income-tax Act in computing the income from house property shall not be limited to the annual letting value of the house property as arrived at after providing for the deduction under the said second proviso." This explanation clearly clarifies the legislative intent. What was latent has been made patent. No other point has been raised. In view of the above, the question as posed by the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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