of Income Tax, Calcutta Vs. Bijoy Kumar Almal  INSC
212 (4 April 1995)
Reddy, B.P. (J) Jeevan Reddy, B.P. (J) Nanavati G.T. (J) B.P.Jeevan Reddy, J.:
1995 SCC (3) 525 JT 1995 (3) 425 1995 SCALE (2)596
This appeal is preferred by the Revenue against the judgment of the Calcutta
High Court answering the question referred to it in favour of the assessee and
against the revenue. The question referred under Section 256(1) of the
Income-Tax Act was "(W)hether, on the facts and in the cir- cumstances of
the case, the Tribunal was right in holding that the statutory allowance
mentioned in Section 23(2) of the Income-tax Act, 1961 should be allowed every
time separately in computing the income from house property failing to the
share of each of the co-owners including the assessee?"
assessment year relevant herein is 1962-63. He respondent was the owner of an
undivided one-third share in a house property during the relevant period. He alongwith
his brother and other co-sharers was occupying the house for his own residence.
In the respondent's assessment, the I.T.O. deducted the amount specified in
sub-section (2) of Section 23 from out of the annual letting value of the house
and then apportioned the balance A.L.V. among the co-owners.
respondent's case was that the deduction provided for by Section 23(2) should
be given separately to each co- owner.
the said dispute which is reflected in the question referred for the opinion of
the High Court.
may state immediately that such a dispute would not really arise after from the
assessment year 1976-77 and onwards because of the insertion of explanation in
Section 26. Disputes had arisen before the said explanation was inserted by
Taxation Laws (Amendment) Act, 1975.
Section 22 provides that the annual value of property consisting of any
buildings and lands appurtenant thereto of which 427 the assessee is the owner,
shall be chargeable to income-tax under the head 'Income from house property'.
Section 23 prescribes the manner in which the annual value has to be
determined. Sub- section (2), which is relevant for our purposes, provided that
where the property consists of a house in the occupation of the owner for the
purposes of his own residence, the annual value of such house shall first be
determined in the same manner as if the property had been let and shall further
be reduced by one-half of the amount so determined or one thousand and eight
hundred Rupees, whichever is less. Section 216, which is the other section
relevant for our purpose, along with its explanation in- serted with effect
from 1.4.1976, reads thus:
owned by co-owners.
Where property consisting of buildings or buildings and lands appurtenant and
their to is owned by two or more persons and their respective shares are
definite and ascertainable, such persons shall not in respect of such property
be assessed as an association of persons, but the share of each such person in
the income from the property as computed in accordance with sections 22 to 25
shall be included in his total income:
For the purposes of this section, in applying the provisions of subsection (2)
of Section 23 for computing the share of each such person as referred to in
this section, such share shall be computed, as if each such person is
individually entitled to the relief provided in that subsection. "
our opinion, the language of Section 26, even without taking into account the
explanation, is clear enough. It provides that where property consisting of
buildings (or buildings and lands appurtenant thereto) is owned by two or more
persons and their respective shares are definite and ascertainable, they shall
not, in respect of such property, be assessed as Association of persons, and
that the share of each such person in the income from the property as computed
in accordance with Sections 22 to 25 shall be included in his total income.
Sections 22 to 25 prescribe the manner in which the income from house property
has to be determined. We are, therefore, of the opinion that the respondent was
justified in claiming that the deduction provided for by Section 23(2) be
allowed to him separately from out of his share in the annual value of the said
house property, inasmuch as he, had a definite and ascertainable share therein.
Indeed this very idea is made clear beyond any doubt by the explanation
appended to Section 26 by the Amendment Act aforesaid.
is brought to our notice that apart from the judgment under appeal (reported in
106 ITR 743), Delhi and Bombay High Courts have also
taken a similar view in MIT v. Shyam Sunder (122 ITR 541) and Tulsi Das v. CIT
[(1983) 63 CTR 324]. The Calcutta High Court itself appears to have followed
the judgment under appeal in CIT v. Shanti Devi Jalan (139 ITR 152).
appeal accordingly fails and is dismissed. No costs.