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TMI Blog1985 (4) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the assessee. As the assessee was employed in Kerala and was also residing in Kerala, he had not occupied the first floor along with his mother during the relevant accounting period. The assessee could, therefore, have claimed total exemption under section 23(3) of the Income-tax Act, 1961 ('the Act') with regard to the assessee's share of the annual value of the first floor. But the assessee returned Rs. 583 as the assessee's share in the notional income of the first floor. He did not return any notional income from the ground floor as the same had not been let out during the accounting period. 3. The original assessment was completed on 20-2-1980 wherein the income returned by the assessee for the first floor, hereinafter referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the residential portion and the first floor as the let out portion is a mistake). Aggrieved by the same, the assessee has come up in appeal. 5. The first contention advanced by the assessee is that no income should have been included with regard to the residential portion as the assessee had not actually occupied the same by reason of the fact of his employment in Kerala. This claim is based on section 23(3). The correctness of the claim was not disputed by the learned departmental representative. But it was pointed out by him that in the original assessment, the income for this portion was assessed to tax on the basis of the return filed by the assessee, that the reopening of the assessment was only to bring to tax the escaped income wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Supreme Court will apply only when the claim for vacancy allowance relates to the entire property and where the entire property had not been let out during the accounting period. It is claimed by the learned counsel for the assessee that when only a portion of the property was being let out and that portion had remained vacant throughout the accounting period, the decision of the Supreme Court will not apply and that the assessee is therefore, entitled to claim vacancy allowance under section 24(1)(ix). In support of the position, the learned counsel relied upon a decision of this Bench of the Tribunal in IT Appeal No. 200 (Coch.) of 1977-78 dated 11-4-1978. In this case, it was held by the Tribunal that section 24(1)(ix) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light of the decision of the Kerala High Court in the case of CIT v. Joy P. Jacob [1985] 151 ITR 19, the ground floor has to be treated as an independent unit and cannot be treated as part of the house property. In this case, the Kerala High Court, following the decision of the Supreme Court in Liquidator of Mahamudabad Properties (P.) Ltd.'s case held that section 24(1)(ix) will not apply if the property had not been let out during the relevant accounting period. But it was pointed out by the High Court that there may be many house properties in one building where the building is divided horizontally or vertically by parts which are independent units and let out or intended to be let out as separate house properties that in the case of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tests to the present case. The mother of the assessee was residing in the first floor. The ground floor was being let out up to the close of the end of the earlier accounting period. The self-occupied portion and the portion let out are on different floors. The copy of the municipal assessment produced by the assessee shows that the annual value was determined by the municipality separately for the two floors. The annual value for the self-occupied portion was determined at Rs. 3,240, while the annual value for the let out portion was determined at Rs. 10,300. This shows that the two portions were being assessed by the municipality separately. We made an offer to the learned counsel for the assessee to restore the matter to the ITO, in c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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