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Interpretation of exemption under section 10(13A) of the Income-tax Act for house rent allowance received by an assessee residing in a house owned by a Hindu undivided family without paying rent. Analysis: The case involves a question referred by the Income-tax Appellate Tribunal regarding the entitlement of the assessee to exemption under section 10(13A) of the Income-tax Act. The assessee, an individual, received a house rent allowance during the assessment year 1982-83, claimed as exempt from tax. The Income-tax Officer denied the claim stating that the assessee did not incur any rent expenditure as he lived in a house owned by the Hindu undivided family without paying rent. The Appellate Assistant Commissioner accepted the claim based on a decision of the Punjab and Haryana High Court. The Tribunal also ruled in favor of the assessee citing the same precedent. However, a retrospective amendment introduced by the Taxation Laws (Amendment) Act, 1984, clarified that the exemption under section 10(13A) does not apply if the residential accommodation is owned by the assessee or no rent expenditure is incurred. As the assessee resided in a house owned by the family without paying rent, the exemption was disallowed. The Explanation added to section 10(13A) neutralized the impact of the Punjab and Haryana High Court decision in a previous case. Additionally, other High Courts like Delhi, Karnataka, Andhra Pradesh, and Rajasthan had disagreed with the Punjab and Haryana High Court's decision in various cases. The court noted that the legislative amendment with retrospective effect superseded the earlier decision, making the Tribunal's decision to allow the exemption incorrect. Consequently, the court ruled against the assessee, stating that the house rent allowance received under the circumstances described was not exempt under section 10(13A) of the Act. No costs were awarded in the matter.
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