RATAN PRABHA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income tax Appellate Tribunal, Jaipur Bench, Jaipur, referred the following question for the opinion of this Court under Section 256 (1) of the Income Tax Act:- "whether on the facts and in the circumstances of the case, the Appellate Tribunal has rightly held that the assessee is not entitled to deduction for vacancy allowance under Section 24 (1) (ix) of the Income-tax Act read with Explanation thereto inserted with effect from 1. 4. 1977, for the assessment year 1977-78. "

(2.) THE assessee derives income from 1/6th share in the house property situated at Bhagwandas Road, Jaipur. One portion of the said property was let-out by the assessee to M/s. Geoffrey Manners Ltd. , at the rent of Rs. 2500/- per month, but during hte accounting period relevant to the assessment year in question, i. e. 1977-78, the house remained vacant throughout the year. THE Income Tax Officer, while framing the assessment, included the Gross Annual let in value of the property in the income of the assessee, subject to the deduction of municipal tax and repairs. He did not allow the deduction of vacancy allowance. Dissatisfied with the order passed by the Income-Tax Officer, the assessee preferred an appeal before the Appellate Assistant Commissioner and the Appellate Assistant Commissioner Income-tax allowed the appeal filed by the assessee and held that the deduction on account of vacancy was allowable in view of the amendment to Section 24 (1) (ix) of the Income-Tax Act, 1961, with effect from 1. 4. 1977. Aggrieved with the order passed by the Appellate Assistant Commissioner, allowing the vacancy allowance, the Revenue preferred an appeal before the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur and the Tribunal, by this judgment dated 29. 9. 80, allowed the appeal filed by the Revenue. THE assessee thereafter moved an application under Section 25 (1) of the Income Tax Act to refer the two questions, mentioned in the application, for the opinion of the High Court. THE Tribunal by its order dated 18. 12. 81 referred only one question, mentioned above, for the opinion of the High Court. So far as the second question was concerned, it was observed by the Tribunal that the question is not necessary to be referred for the opinion of the High Court as that is not the issue involved in the case.

(3.) NOW, we have to see the implication of the Explanation inserted with effect from 1. 4. 77 in Sub Clause (ix) of Section 24 (1) of the Act. After a careful reading of Clause (ix) of Section 24 (1) and the Explanation added to it with effect from 1- 4-77, we are of the opinion that the Explanation inserted in 1977 is merely clarificatory in nature and it only amounts to declaration of the pre-existing position and no change in the law has taken place as it only clarifies the existing position of the provision of Section 24 (1) (ix ). Section 24 (1) (ix), thus, covers only situation of vacancy preceding or following the period of let-in during the same year and for the property which has been let-out at all during the relevant year.