2004 (8) TMI 627 - AT - Income Tax

Summary

Issues:
Claim of exemption under section 23(2) for property at Sushant Lok owned by minor son - Whether the property qualifies as self-occupied property for exemption.

Analysis:
The appeal before the Tribunal concerned the claim of exemption under section 23(2) of the Income Tax Act for a property at Sushant Lok owned by the minor son of the assessee. The Assessing Officer had disallowed the claim, stating that the minor son was residing with his parents in another property and occasional visits to the Sushant Lok property did not constitute occupation for residential purposes. The CIT(A), however, allowed the claim, emphasizing that even if the minor's income was clubbed with the assessee's, the exemption should be granted for self-occupied property as per section 23(2). The revenue contended that since the minor son resided with his parents elsewhere, the claim for exemption was not valid. The revenue argued that section 23(2) allows exemption for only one house. The assessee's counsel countered, citing legal provisions and court decisions, that the owner's intention to use and retain exclusive control over the property for residential purposes sufficed for claiming exemption.

The Tribunal examined the provisions of section 23 of the Income Tax Act, which govern the computation of annual property value and income for properties occupied by the owner for residential purposes. It was noted that the minor son owned multiple properties, but the claim for self-occupied property exemption was specifically for the Sushant Lok property. Referring to a Gujarat High Court decision, it was highlighted that sections 64 and 23(2) operate in different contexts. The Tribunal emphasized that the essential aspect for claiming exemption under section 23(2) is the owner's exclusive control and intention to use the property for residential purposes, rather than compulsory physical occupation. The Tribunal rejected the Assessing Officer's reasoning that occasional visits did not constitute occupation, upholding the CIT(A)'s order granting the exemption.

In conclusion, the Tribunal dismissed the revenue's appeal, affirming the CIT(A)'s decision to allow the claim of exemption under section 23(2) for the Sushant Lok property owned by the minor son. The judgment clarified that the owner's intention and exclusive control over the property for residential purposes were key factors in determining eligibility for self-occupied property exemption under the Income Tax Act.