9911796707
TMI Blog2004 (10) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... rise to the present reference are as follows: The present reference relates to the assessment year 1979-80 of which the relevant previous year ends on March 31, 1979. The applicant is an individual. He derives income from salary and property. He owns a property situated at B-40, Nirala Nagar, Lucknow. The ground floor of the property was let out on August 1, 1978, to the Fertilizer Corporation of India Ltd. on a monthly rent of Rs. 4,500 out of which Rs. 1,250 was payable towards the installation of booster pump and other fixtures. The applicant claimed deduction under clause (c) of the second proviso to section 23(1) of the Act. He claimed the total deduction of Rs. 6,400 on the ground that there were four units in the said property. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat deduction under clause (c) of the second proviso to section 23(1) of the Act is available only to the residential unit and if the unit has been put to use for non-residential purpose no relief can be granted. Having heard learned counsel for the parties we find that it is not in dispute that the property in question has been let out to the Fertilizer Corporation of India Ltd. for non-residential use, i.e., for commercial purpose. In the order passed by the Appellant Assistant Commissioner a categorical finding has been recorded that the property has been let out for non-residential purpose. The aforesaid finding has not been challenged by the applicant. The relief under clause (c) of the second proviso to section 23(1) of the Act is av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in items (i) to (iii) above are fulfilled, only then the relief under clause (c) of the second proviso to section 23(1) of the Act is available otherwise not. In the case of Dr. P.A. Varghese [1971] 80 ITR 180 the Kerala High 10 Court has held that where the assessee agreed to let out the second floor of a building for a rent of Rs. 2,350 per mensem agreeing to provide for partitions, necessary lavatories, closets, etc., air-conditioning for one room, one fluorescent tube fitting, separate electric meters, uninterrupted water supply and electric lift, the letting was not of machinery, plant or furniture but only the letting of a building with certain amenities and, therefore, the provisions of section 56(2)(iii) of the Act were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with its own electric meter or water supply connection. Sub-clauses (i) and (ii) of clause (b) of the proviso to section 23(1)(b) also indicates that in order to constitute a residential unit for the purposes of the section, it must have a separate annual value. In the case of S. C. Majumdar v. CIT [1983] 141 ITR 486, the Calcutta High Court has held that the proviso to section 23(1) of the Act uses the expressions "building" and "residential unit". These are not defined in the Act and have to be given their ordinary meaning. The building should certainly be one habitable and complete and it may be either one storeyed or have more than one storey. Hence on reading clause (b) of the second proviso to section 23(1) of the Act, it seems that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot be taken to be a residential unit. It has further held that the building had been assessed by the municipal corporation as a single unit and there was no separate annual value for each room and hence the question of application of the second proviso to section 23(1) of the Act treating each of the rooms in the building as a separate residential unit would not arise. The assessee was not entitled to the deduction claimed. In the case of CIT v. Smt. Shyama Devi Dalmia [1992] 194 ITR 114, the 15 Calcutta High Court has held that from the legislative history, it will be evident that the object of allowing this concession was to encourage the construction of residential houses. Even if a house is constructed as a residential unit, but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd a residential unit let out to tenants. Where the residential unit referred to in the second proviso to section 23(1) of the Act is in the occupation of the owner for the purposes of his own residence, he does not get the concession as provided therein. Where, however, a residential unit is not in the occupation of the owner but has been let out to tenants for the purpose of their residence, the concession as admissible under the second proviso to section 23(1) will be available to the owner of the residential unit. The expression "residential unit", in the context in which it is used, necessarily denotes a dwelling unit for residence. In the case of CIT v. Purshottam Dass [2001] 247 ITR 516, the Delhi High Court has distinguished the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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