COMMISSIONER OF INCOME TAX Vs. S BALAMMAL

JUDGEMENT

(1.) TWO questions have been referred to this court at the instance of the Revenue, (1) As to whether with regard to the second proviso to Section 23(1) of the Income-tax Act, 1961, the Appellate Tribunal was justified in allowing the claim of the assessee in respect of new residential units, and (2) As to whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the word "income" referred to in the second proviso to Section 23(1) could refer to only the annual value and not the income after the deductions admissible under Section 24 of the Act.

(2.) THE assessee is an individual and she was assessed to tax in individual status for the years 1975-76 and 1976-77. She had constructed a new property No. 14, Ramaswamy Street, Madras-1, with borrowed funds. THE property consisted of four floors and the first floor is occupied by the assessee and the other three floors are rented out to the tenants. In respect of this property, the assessee returned a loss of Rs. 12,974 and Rs. 816 in the returns for the assessment years referred to above, and in doing so, the assessee reduced the annual value for eight units at Rs. 1,200 per unit under the second proviso to Section 23(1) of the Income-tax Act, 1961. THE Assessing Officer did not accept the assessee's computations, which necessitated the assessee to prefer an appeal.