COMMISSIONER OF INCOME TAX Vs. NAUSER K KANGA

JUDGEMENT

(1.) THE question referred to us is as follows :

(2.) WE are concerned in this reference with the assessment of an individual, the assessment years being 1963 64 and 1964 65. The assessee had a one third share in certain immovable property of which he was also in self occupation. At the time of the original assessments while working out income from this property allowance was given on the basis that the same was self occupied property. This was done for both the years. Thereafter, the ITO took proceedings under S. 154 of the IT Act, 1961, for both the years on the footing that the "self occupied property allowance" was allowed separately to all the occupants instead of restricting it proportionately. Although the assessee objected to the reassessment, the assessee's contentions, both on the propriety of the reassessment as well as on the point on which reassessment proceedings were initiated, were overruled and the income reassessed for both the assessment years at a higher figure.

(3.) IT was the ITO who then carried the matter in further appeal to the Tribunal. Before the Tribunal the Departmental Representative referred to S. 26 of the Act and submitted that S. 26 would have to be applied where there are co owners but that the allowance contemplated under S. 23(2) will not be available to the co owners. The Tribunal did not accept this contention. In the approach of the Tribunal, the co owners were not joint owners, but owners in common for which S. 26 had provided a special method of computation of income and if that method was logically applied then to the share of each co owner, the allowance as was available to a full owner would have to be given also to a co owner (but obviously restricted to his share). According to the Tribunal, S. 26 contemplated assessment of income from jointly owned property in the hands of co owners in separate compartments in accordance with their shares which are required to be ascertained. When the computation of this income is required to be made separately, then, in the view of the Tribunal, the benefit of S. 23(2) cannot be excluded to one of such co owners who, under S. 26, is treated not along with other co owners as an AOP but by a special provision individually and separately in respect of his specific share.