MANGALDAS H VERMA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) MANGALDAS H. Verma, the assessee, owned a property at Sion consisting of two floors. He had let out the ground floor and the first floor thereof was occupied by him. In the years of account, viz., years ending March 31, 1962, and March 31, 1964, relevant to the asst. yrs. 1962 63 and 1964 65, the assessee shifted to his bungalow at Juhu, which was constructed earlier. The first floor in Sion property was not used by him nor was it kept vacant for his use. It was, however, not let out to anybody. The simple question which arose for consideration before the taxing authorities and the Tribunal was whether the assessee was entitled to any allowance in respect of the vacancy in regard to that portion of the property. The ITO did not give any allowance on account of vacancy in the computation of the assessee's income from the property for both the years. The order of the ITO was upheld by the AAC and by the Tribunal. The Tribunal took the view that the deduction under S. 24(1)(ix) of the IT Act, 1961, will be available to the assessee provided two conditions are fulfilled : (1) The property must have been actually let out for some time, and (2) the property must have been vacant during a part of the accounting period. Since, in the present case, at no time the first floor, which was initially occupied by the assessee, was let out, in the opinion of the Tribunal, the assessee was not entitled to deduction as contemplated by S. 24(1)(ix). He, accordingly, confirmed the order that was passed by the taxing authorities.

(2.) FROM this order of the Tribunal, the following question has been referred to us for our determination :

(3.) SEC . 24(1) deals with deductions from "Income from house property." We are concerned with cl. (ix) thereof and its provisions are as under :