9911796707
TMI Blog1979 (7) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... f-occupation provided in section 23(2) of the Income-tax Act, 1961 ?" In order to understand the scope of the question, it is necessary to refer briefly to the material facts as revealed from the statement of case submitted by the Tribunal, which lie in a short compass. The assessee, an individual, who is an employee of Vazir Sultan Tobacco Co.Ltd., owns a house whose annual letting value was declared for the assessment year 1970-71 relevant to the accounting year ending with March 31, 1970, at Rs. 1,800 in the return filed by him, disclosing income from salary at Rs. 51,086. The house was in fact let out by the assessee, the owner, to his employer-company on a monthly rent of Rs. 250 and the employer-company had allotted the same house t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a that the assessee can have the benefit of the provisions of s. 23(2) only when the house has been occupied by the owner for the purpose of his own residence but not in any other capacity and, therefore, the view taken, by the Tribunal is correct. The answer to the question depends upon the provisions of ss. 22 and 23. Sections 22 to 27 of Chap. IV of the Act deal with " Income from house property ". Section 24 provides for deductions from income from house property, whereas s. 25 indicates the amounts not deductible from income from house property. Section 26 applies to cases where property is owned by co-owners. Section 27 defines the terms " owner of house property ", " annual charge ", etc., for the purpose of ss. 22 to 26. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he property is in the occupation of a tenant, the taxes levied by any local authority in respect of such property shall be deductible in determining the annual value. Sub-s. (2) of s. 23 which is relevant and material for our purpose, may be. noticed: "(2) Where the property consists of-- (i) a house in the occupation of the owner for the purposes of his own residence, the annual value of such house shall first be determined in the same manner as if the property had been let and further be reduced by one-half of the amount so determined or one thousand and eight hundred rupees, whichever is less ; (ii) more than one house in the occupation of the owner for the purposes of his own residence, the provisions of clause (i) shall apply onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se property, is not liable to be charged for the income from such house property. As the charge created under s. 22 in respect of income from house property being admittedly upon the owner, legal or beneficial the relief or benefit provided under sub-s. (2) of s. 23, which is enacted as to how the annual value of house property is determined for the purpose of s. 22, can come to the aid of only the owner, legal or beneficial, of the house. The intendment and object of providing this beneficial method of determining the annual value of the house property under sub-s. (2) of s. 23 is to provide relief to the owner when he, in his capacity as owner, occupies the same for his own residence. The relief contemplated under sub-s. (2) would not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, of the firm view that the provisions of s. 23(2) cannot be applied to cases where the owner of the house is not occupying his own house for his own residential purpose. In the case on hand, the owner assessee was not actually occupying the house as owner for his own residence. As he had let out the house to his employer company which had allotted it to him as rent-free quarters, he must be held to have been in occupation of the house belonging to him in his capacity as sub-tenant of his employer company although his occupation is for his own residential purpose. The fact that he was not occupying the house in question for his residential purposes in his capacity as owner, upon whom a charge is created under s. 22 in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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