Law:

Section:

Section 24 of the Income-tax Act, 1961 - Income from house property - Deductions - Assessment year 1962-63 and 1964-65 - Whether deduction under section 24(1)(ix) can only be available if property is let prior to vacancy arising - Held, yes - Whether where at no time prior to accounting periods, relevant to assessment years in question, first floor of property in question was let out, no deduction under section 24(1)(ix) was permissible to assessee in respect of such portion of property for assessment years in question during which vacancy arose - Held, yes FACTS The assessee owned a property consisting of two floors. He had let out the ground floor and the first floor was occupied by him. In the accounting years relevant to the assessment years in question, the assessee shifted to his bungalow. The first floor in the property was not used by him nor was it kept vacant for his use. It was, however, not let out to anybody. The Income-tax Officer 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. The Tribunal held that since, at no time the first floor, which was initially occupied by the assessee, was let out, the assessee was not entitled to deduction as contemplated by section 24(1)(ix) and as such confirmed the order of the AAC. On reference : HELD The provisions of clause (ix ) of section 24(1) can only be attracted if the condition therein mentioned is fulfilled. A deduction as contemplated by this clause can only be available if the property is let, prior to the vacancy arising. It is only if, it was so let out then alone the question of claiming a deduction in respect of portion of the annual value appropriate to any vacant part can arise. In the instant case, at no time prior to the accounting periods relevant to the two assessment years, the first floor of the property was ever let out to anybody. Initially, it was self-occupied by the assessee and after the assessee shifted to his new bungalow, it was not let out to anybody. If that was so, on a plain reading of the provisions of clause (ix ) of section 24(1), it was quite clear…

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