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Assessability of bungalows under section 9 of the Indian Income-tax Act, XI of 1922. Interpretation of the term "vacancies" in the context of the Act. Retrospective assessment under section 34 of the Act. Assessability of Bungalows: The judgment revolves around determining whether certain bungalows belonging to the Raja are assessable under section 9 of the Indian Income-tax Act. The critical sub-section in question is 1(vii), which deals with assessing "vacancies." The court deliberates on the meaning of "vacancies" and whether the bungalows can be considered vacant for assessment purposes. The court examines the Manual's guidance, emphasizing that the bungalows in question are never let out but are maintained for specific purposes. The court concludes that the bungalows, though ready for occupation, fall within the scope of assessable property as per the Act, even if not lived in throughout the year. Reference is made to a similar case law to support this interpretation. Interpretation of "Vacancies": The court analyzes the Manual's instruction that the sub-section applies only to property usually let to a tenant. However, the court disregards this interpretation and focuses on whether the bungalows were ready for occupation by the Raja, his guests, or staff members. The court concludes that the bungalows, even if not occupied throughout the year, are assessable as long as they are maintained and ready for habitation, aligning with the statutory provisions. The court cites a legal precedent to support the view that readiness for occupation suffices for assessability under the Act. Retrospective Assessment under Section 34: The judgment also addresses the issue of retrospective assessment under section 34 of the Act. It discusses a previous year's assessment where the Income-tax Officer concluded that the Raja was not assessable for the bungalows. The court compares the Indian Act's wording with the English Act of 1918 to interpret the scope of "escaped assessment." The court opines that the provision applies not only to inadvertent omissions but also to deliberate errors in assessment by the Income-tax Officer. Consequently, the court rules against the assessee, holding that the bungalows are not vacant for assessment purposes and that the assessing Officer can recover income tax for the previous year under section 34. In conclusion, the judgment determines the assessability of the bungalows under the Indian Income-tax Act, interprets the term "vacancies" in light of statutory provisions, and addresses the retrospective assessment issue under section 34, ruling in favor of the assessing Officer.
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