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TMI Blog1999 (4) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... word 'income' referred to in the second proviso to section 23(1) could refer to only the annual value and not the 'income' after the deduction admissible under section 24 ?" The assessee had claimed the benefit of the deduction under section 24 of the Income-tax Act, 1961, after computing the annual value in accordance with sections 22 and 23. The result of such computation was loss of Rs. 23,451. The assessment years are 1974-75 to 1976-77. Section 23 of the Act as it stood prior to its amendment in 1984 at the end of the second proviso contained these words : "So, however, that the income in respect of any residential unit referred to in clause (a) or clause (b) is in no case a loss". The Assessing Officer held that the effect of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25 of the Act as it stood prior to the amendment, it is clear that there was no limitation on the right of the assessee to compute the loss while computing the income from house property. Section 22 of the Act provides that the annual value of the property consisting of the buildings and lands referred to therein shall be chargeable to income-tax under the head "Income from house property". Section 23(1) sets out the manner in which the annual value is to be ascertained. The second proviso to section 23(1) provides for deductions from the value so ascertained in respect of the buildings referred to in clauses (a) and (b) of that proviso. If the erection of those buildings had commenced after April 1, 1961, and completed before or after A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be made from out of the amount ascertained as the annual value under section 23(1)(a) or 23(1)(b) as reduced by the amounts referred to in the second proviso. Section 24 itself does not provide that the result of the computation can never be a loss or that the loss is to be ignored. Section 24 is not made subject to the second proviso to section 23(1). The words of limitation referred to in that proviso are not to be regarded as being part of section 24. The limitation with regard to the extent of the deduction of the annual value provided for in the second proviso to section 23(1) is only with reference to the annual value determined under section 23(1)(a) or 23(1)(b) and it has no relevance whatever for determining the extent of ded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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