Retrospective Explanation to house rent allowance exemption bars relief where the assessee occupied self-owned accommodation.

Retrospective insertion of the Explanation to section 10(13A) denied house rent allowance exemption where the assessee occupied residential accommodation owned by him, or where no actual rent expenditure was incurred. Because the amendment operated from 1 April 1976, it governed the assessment years in question. On that statutory basis, an assessee living in his own house could not satisfy the condition for exemption, and the claim under section 10(13A) failed.

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Issues: Whether the assessee was entitled to exemption under section 10(13A) of the Income-tax Act in respect of house rent allowance received for the assessment years 1979-80 and 1980-81.

Analysis: An Explanation was inserted to clause (13A) of section 10, declaring that the exemption would not apply where the residential accommodation occupied by the assessee was owned by him or where no actual expenditure on rent had been incurred. The Explanation was introduced by the Taxation Laws (Amendment) Act, 1984 with retrospective effect from 1 April 1976, and therefore governed the assessment years in question. Since the assessee was residing in his own house, the statutory condition for exemption was not satisfied.

Conclusion: The assessee was not entitled to the exemption under section 10(13A); the question was answered against the assessee and in favour of the Revenue.

Ratio Decidendi: Where a retrospective Explanation excludes exemption for house rent allowance in cases where the residential accommodation is owned by the assessee, the exemption cannot be claimed for assessment years covered by the retrospective operation.

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