1981 (10) TMI 97 - AT - Income Tax

Summary

Issues:
- Denial of deduction under section 23(3)(a) by the revenue
- Interpretation of section 23(3)(a) in the context of property ownership by an HUF
- Application of the decision of the Tribunal for earlier assessment years to the current assessment year

Analysis:
The judgment deals with the appeal filed by the revenue seeking to deny a deduction under section 23(3)(a) granted to the assessee by the AAC for the assessment year 1976-77. The ITO had made a cryptic statement regarding the property income without clear reasons for rejecting the assessee's claim. The Tribunal's earlier decision for the assessment years 1973-74 and 1974-75 established that the abatement under section 23(3)(a) was available to the owner, Deepak L. Bankar, even though his father resided in the property. The revenue contended that a change in the assessment year's facts precluded the application of the earlier Tribunal decision due to the property being assessed in the hands of an HUF for this year, where Deepak L. Bankar was the karta.

The revenue's argument relied on a decision of the Madhya Pradesh High Court, contending that section 23(3)(a) could not apply to an HUF as it cannot actually occupy the house. However, the Tribunal rejected this argument based on the Supreme Court's interpretation of the term "individual" to include a group of individuals, such as an HUF. The judgment emphasized that the essence of the section was to provide abatement for a residential house not actually occupied by the owner, as long as certain conditions were met, irrespective of the owner being an individual or an HUF.

The Tribunal found that all conditions under section 23(3)(a) were satisfied in this case, as the property was not in the actual occupation of the HUF, not let out, and the owner did not derive any benefit. Therefore, the order of the AAC directing the ITO to recompute the total income after allowing the relief under section 23(3)(a) was confirmed. The appeal by the revenue was dismissed based on the interpretation and application of the relevant legal provisions and precedents.