Full Judgment Text
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PETITIONER:
COMMISSIONER OF Income Tax, Calcutta
Vs.
RESPONDENT:
BIJOY KUMAR ALMAL
DATE OF JUDGMENT04/04/1995
BENCH:
JEEVAN REDDY, B.P. (J)
BENCH:
JEEVAN REDDY, B.P. (J)
NANAVATI G.T. (J)
CITATION:
1995 SCC (3) 525 JT 1995 (3) 425
1995 SCALE (2)596
ACT:
HEADNOTE:
JUDGMENT:
B.P.JEEVAN REDDY, J.:
1. This appeal is preferred by the Revenue against the
judgment of the Calcutta High Court answering the question
referred to it in favour of the assessee and against the
revenue. The question referred under Section 256(1) of the
Income-Tax Act was "(W)hether, on the facts and in the cir-
cumstances of the case, the Tribunal was right in holding
that the statutory allowance mentioned in Section 23(2) of
the Income-tax Act, 1961 should be allowed every time
separately in computing the income from house property
failing to the share of each of the co-owners including the
assessee?"
2. The assessment year relevant herein is 1962-63. He
respondent was the owner of an undivided one-third share in
a house property during the relevant period. He alongwith
his brother and other co-sharers was occupying the house for
his own residence. In the respondent’s assessment, the
I.T.O. deducted the amount specified in sub-section (2) of
Section 23 from out of the annual letting value of the house
and then apportioned the balance A.L.V. among the co-owners.
The respondent’s case was that the deduction provided for by
Section 23(2) should be given separately to each co- owner.
It is the said dispute which is reflected in the question
referred for the opinion of the High Court.
3. We may state immediately that such a dispute would not
really arise after from the assessment year 1976-77 and
onwards because of the insertion of explanation in Section
26. Disputes had arisen before the said explanation was
inserted by Taxation Laws (Amendment) Act, 1975.
4. Section 22 provides that the annual value of property
consisting of any buildings and lands appurtenant thereto of
which
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the assessee is the owner, shall be chargeable to income-tax
under the head ’Income from house property’. Section 23
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prescribes the manner in which the annual value has to be
determined. Sub- section (2), which is relevant for our
purposes, provided that where the property consists of a
house in the occupation of the owner for the purposes of his
own residence, the annual value of such house shall first be
determined in the same manner as if the property had been
let and shall further be reduced by one-half of the amount
so determined or one thousand and eight hundred Rupees,
whichever is less. Section 216, which is the other section
relevant for our purpose, along with its explanation in-
serted with effect from 1.4.1976, reads thus:
"Property owned by co-owners.
26. Where property consisting of buildings
or buildings and lands appurtenant and their
to is owned by two or more persons and their
respective shares are definite and
ascertainable, such persons shall not in
respect of such property be assessed as an
association of persons, but the share of each
such person in the income from the property as
computed in accordance with sections 22 to 25
shall be included in his total income:
Explanation: For the purposes of this section,
in applying the provisions of subsection (2)
of Section 23 for computing the share of each
such person as referred to in this section,
such share shall be computed, as if each such
person is individually entitled to the relief
provided in that subsection. "
5. In our opinion, the language of Section 26, even
without taking into account the explanation, is clear
enough. It provides that where property consisting of
buildings (or buildings and lands appurtenant thereto) is
owned by two or more persons and their respective shares are
definite and ascertainable, they shall not, in respect of
such property, be assessed as Association of persons, and
that the share of each such person in the income from the
property as computed in accordance with Sections 22 to 25
shall be included in his total income. Sections 22 to 25
prescribe the manner in which the income from house property
has to be determined. We are, therefore, of the opinion
that the respondent was justified in claiming that the
deduction provided for by Section 23(2) be allowed to him
separately from out of his share in the annual value of the
said house property, inasmuch as he, had a definite and
ascertainable share therein. Indeed this very idea is made
clear beyond any doubt by the explanation appended to
Section 26 by the Amendment Act aforesaid.
6. It is brought to our notice that apart from the
judgment under appeal (reported in 106 ITR 743), Delhi and
Bombay High Courts have also taken a similar view in MIT v.
Shyam Sunder (122 ITR 541) and Tulsi Das v. CIT [(1983) 63
CTR 324]. The Calcutta High Court itself appears to have
followed the judgment under appeal in CIT v. Shanti Devi
Jalan (139 ITR 152).
7. The appeal accordingly fails and is dismissed. No
costs.
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