9911796707
TMI Blog1984 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ection has no application ? " The brief facts leading to this reference application are that M/s. Instrumentation Limited, Kota (hereinafter referred to as " the assessee company "), had constructed houses for the purpose of residence of its employees at Palghat, Kerala, where it has a branch. The Income-tax Officer computed the annual value of the property as Rs. 97,699 on the basis of the main provisions of section 23(1) read with the first proviso and front the above amount of Rs. 97,699, the Income-tax Officer allowed deduction of an amount of Rs. 62,400 under the second proviso to section 23(1) of the Act. This deduction was allowed in view of the fact that the assessee company had constructed residential units for its employees. Af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich reads as under and which existed at the relevant time, in order to appreciate the contention raised by learned counsel for both the parties : " Section 23. (1) For the purposes of section 22, the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year: Provided that where the property is in the occupation of a tenant and the taxes levied by any local authority in respect of the property are, under the law authorising such levy, payable wholly by the owner, or partly by the owner and partly by the tenant, a deduction shall be made equal to the part, if any, of the tenant's liability borne by the owner. Explanation.--For the purposes of this sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to sub-section (1) is in the occupation of the owner for the purposes of his own residence, nothing contained in that proviso shall apply in computing the annual value of that residential unit. (3) Where the property referred to in sub-section (2) consists of one residential house only and it cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in building not belonging to him, the annual value of such house shall (a) if the house was not actually occupied by the owner during the whole of the previous year, be taken to be nil, or (b) if the house was actually occupied by the owner for a fraction of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lays down that the annual value is that sum which is arrived at after the deduction of the amount given in the second proviso. The second proviso clearly lays down that the annual value is to be first determined on the basis of the main section along with the first proviso and it is only from the annual value so determined that further deduction is allowed under the second proviso for new residential units. If we look to section 23(2), it becomes further clear that the basis for arriving at the annual value of a property which is in the occupation of the owner for the purpose of his own residence is to be determined according to section 23(1) and after determining such annual value, reduction equal to half of the amount so determined or R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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