COMMISSIONER OF INCOME TAX Vs. JOY P JACOB

JUDGEMENT

(1.) The following question has been referred to us at the instance of the revenue by the Income Tax Appellate Tribunal, Cochin Bench:

(2.) It was contended on behalf of the revenue that in a case where the vacancy did not follow letting out, but preceded it, the benefit of the first limb of S.24(1)(ix) would not be available. Nor would the second limb be attracted in a case where a part or parts of the building in respect of which remission is claimed had not been let out in the relevant accounting years. The revenue pointed out that before remission was granted the assessee had to prove that the building in question had been let before it fell vacant during the relevant accounting year. The same principle would apply in relation to a part or parts of the building where remission is claimed. The assessee had to prove that vacancy arose subsequent to the letting out of those parts. This argument was rejected by the Tribunal by its order dated 24-2-1978. Hence the present question at the instance of the revenue.

(3.) Before we read the relevant clause, it must be stated that there is no direct authority on the construction of this clause in regard to the points arising for decision. In Muhamudabed Properties P. Ltd. v. CJT (1980) 124 ITR 31 (SC) the Supreme Court stated that vacancy remission would not be available in a case where a building had. not been let out during the year previous to the relevant assessment year. To this effect a Full Bench of this Court stated in C.I.T. v. Pradeepkumar M. Shah (1981) 130 ITR 118 (Ker.). See also Mangaldas H. Varma v. C.I T. (1980) 124 ITR. 185 (Bom.). But in none of these cases the question now directly posed before us was considered. The question is whether or not the benefit of remission would accrue in respect of a building which was vacant for a part of the year preceding the letting out and also in respect of parts of that building which had not been let out in the relevant accounting year.