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PETITIONER:

COMMISSIONER OF Income Tax, Calcutta

Vs.

RESPONDENT:

BIJOY KUMAR ALMAL

DATE OF JUDGMENT04/04/1995

BENCH:

JEEVAN REDDY, B.P. (J)

BENCH:

JEEVAN REDDY, B.P. (J)

NANAVATI G.T. (J)

CITATION:

1995 SCC (3) 525 JT 1995 (3) 425

1995 SCALE (2)596

ACT:

HEADNOTE:

JUDGMENT:

B.P.JEEVAN REDDY, J.:

1. 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?"

2. The 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.

The respondent's case was that the deduction provided for by

Section 23(2) should be given separately to each co- owner.

It is the said dispute which is reflected in the question

referred for the opinion of the High Court.

3. We 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.

4. Section 22 provides that the annual value of property

consisting of any buildings and lands appurtenant thereto of

which

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the assessee is the owner, shall be chargeable to income-tax

under the head 'Income from house property'. Section 23

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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:

"Property owned by co-owners.

26. 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:

Explanation: 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. "

5. In 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.

6. It 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).

7. The appeal accordingly fails and is dismissed. No

costs.

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