COMMISSIONER OF INCOME TAX Vs. JATIA M P

JUDGEMENT

(1.) THIS is a reference under Section 66(1) of the Indian Income-tax Act, 1922. Smt. Indermani Jatia was the assessee at all material times. The assessment years are 1957-58, 1958-59 and 1959-60. Her legal representative, Madhav Prasad Jatia, has been brought on the record.

(2.) THE assessee owned at Delhi a building known as Grand Hotel. She experienced much difficulty in collecting rent from her tenant, who occupied Grand Hotel. At the time of the assessment for 1956-57, the assessee was able to secure deduction under item No. 38 of the Government Notification No. 878-F dated March 21, 1922, as regards unrealised rent in previous years. THE assessee made similar claims for deduction under item No. 38 of the Government Notification No. 878-F dated March 21, 1922, at the time of assessment for the years 1957-58, 1958-59 and 1959-60. THE claim was not specifically made before the Income-tax Officer. A claim was made in appeal before the Appellate Assistant Commissioner. He declined to recognise the claim made at such a late stage. When the matter went before the Tribunal in further appeal, the Tribunal permitted the assessee to raise the point before it. On merits it was urged for the department that, in view of the deduction made for the assessment year 1956-57, no further deduction could be claimed for the assessee for the subsequent years. This contention advanced on behalf of the department was not accepted by the Tribunal. THE Tribunal took the view that the claim could properly be made for deduction for the relevant assessment years in spite of the fact that a similar claim had been allowed in the assessee's favour in the year 1956-57. On this view, the Tribunal directed the Income-tax Officer to compute the total rent, which had become irrecoverable in respect of Grand Hotel property, and to the extent that it had not been exempted in previous assessment, it should be exempted for the year under assessment.

(3.) THE Government notification dated March 21, 1922, runs thus: