Law:

Section:

Section 24 of the Income-tax Act, 1961 - Income from house property - Deductions - Assessment year 1969-70 - Whether unless vacancy of house property occurred a during part of year and did not last for entire year, section 24(1)(ix) could have no application - Held, yes - Whether where part of house property belonging to assessee had been vacant throughout year, assessee was not entitled to vacancy allowance in respect of such vacant property under section 24(1)(ix) - Held, yes FACTS During the period to the assessment year in question, the godowns and rooms owned by assessee were let out. But during the accounting year relevant to assessment year in question they were vacant except two rooms which had been let out to two firms in which the assessee was interested. The ITO included an annual letting value of the part of the property which was vacant throughout the year and the income on such basis was computed. He held that no vacancy allowance was to be given in respect of the property which was vacant throughout the year. The AAC confirmed this order of the ITO. The Tribunal held that the part of the property had been vacant throughout the year and this would suffice to entitled the assessee to the vacancy allowance. On reference: HELD Clause (ix) of section 24(1) indicates that the vacancy of the property must be during a part of the year in question and not for the entire year. This aspect of meaning is further emphasised by the latter part of clause (ix ) which provides for the calculation of the vacancy allowance of any part in proportion to the period during which the part was wholly unoccupied. Further, section 24(1)(ix) makes a significant departure from the language of its predecessor, section 9(1)(vii) of the Indian Income-tax Act, 1922. On the language of said section 24(1)(ix), it was to be held that unless the vacancy occurred during a part of the year and did not last for the entire year, the relevant part of the section could have no application. Therefore, the assessee was not entitled to vacancy allowance in respect of such property under section 24(1)(ix). Note : The decision is in favour of the revenue. CASES REFERRED TO Kasturchand Ltd. v.…

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