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TMI Blog1980 (9) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment and upholding the view taken by the AAC that the respondent assessee is entitled to the benefit of s. 23(1)(b) of the Act in respect of 14 rooms contained in a building treating them as 14 separate residential units: " Whether, on the facts and in the circumstances of the case, the building in question can be said to consist of 14 residential units and hence the assessee is entitled to deduction permissible under the second proviso to section 23(1) of the Income-tax Act, 1961, in respect of each unit ? " The assessment years with which we are concerned in these cases are 1973-74, 1974-75 and 1975-76. During the year ending March 31, 1973, the assessee completed the construction of a building bearing door No. XXXVI-1206-C con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence the assessee's claim for allowance for each room u/s. 23(1)(b) is disallowed." However, notwithstanding the aforesaid finding entered by him, while actually computing the tax liability of the assessee the ITO appears to have allowed to the assessee the benefit of s. 23(1)(b) in respect of one unit (apparently treating the whole building as a single unit). The matter having been taken up by the assessee in appeal before the AAC, the AAC upheld the assessee's claim for the grant of the benefit under s. 23(1)(b) in respect of the 14 rooms by treating them as distinct residential units. The said view was confirmed by the Tribunal, before which the department carried the matter in second appeal. Thereafter, the aforesaid question has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rupees, an amount of one thousand two hundred rupees, 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. " A somewhat similar provision was introduced in the Indian I.T. Act, 1922, by s. 5 of the Finance Act, 1961, with effect from April 1, 1961, whereby a proviso was added to cl. (a) of sub-s. (2) of s. 9 of that Act. That proviso was in the following terms: "Provided further that in respect of a building the erection of which is begun and completed after the 1st day of April, 1961, the annual value for a period of three years from the date of such completion shall be reduced by a sum equal to the aggregate of (a) in respect of any residential unit (compris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (a) and (b) of the proviso will, in our opinion, take within their ambit only buildings comprising a plurality of dwelling units like flats, which by themselves will constitute houses or homes. Each such dwelling unit will ordinarily be a separate house in itself with its own electricity meter and water supply connection. Sub-classes (i) and (ii) of the proviso also furnish a clear indication that in order to constitute a residential unit for the purposes of the section, it must have a separate annual value. In the present case, the finding of fact recorded by the tax authorities is that the entire building has been registered with the Municipal Corporation as a single unit for taxation purposes and there is only a single demand for tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to alter its popular interpretation. On that point I have the authority of Sir George Jessel in Attorney-General v. Mutual Tontine Westminster Chambers Association [1876] 1 Ex D 469, where he said that a building of this nature is, both in ordinary parlance and in legal meaning, a dwelling house, although it may also be for certain purposes regarded as a number of separate messages. He illustrated the proposition by saying that any one of the buildings in the Temple or Lincoln's Inn, which, as we all know, are divided into separate chambers, is nevertheless one house." The reasons stated by the Tribunal for concluding that the assessee is entitled to the benefit of s. 23(1)(b) in respect of all the 14 rooms treating them as separate res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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