House rent allowance exemption denied where the assessee occupies his own house and incurs no actual rent under section 10(13A).

House rent allowance exemption under section 10(13A) is confined to a special allowance paid to meet rent actually incurred for residential accommodation occupied by the assessee, and the retrospective Explanation excludes cases where the accommodation is owned by the assessee or no rent expenditure has been incurred. Where the assessee occupied his own house, the statutory exception applied and the allowance was not exempt; earlier contrary views could not survive the retrospective amendment.

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Issues: Whether house rent allowance received by an assessee occupying his own house and not actually paying rent is exempt under section 10(13A) of the Income-tax Act, 1961.

Analysis: Section 10(13A) grants exemption only to a special allowance paid to meet expenditure actually incurred on rent for residential accommodation occupied by the assessee. The Explanation, inserted retrospectively from 1 April 1976, excludes cases where the accommodation is owned by the assessee or where no rent expenditure has actually been incurred. For the assessment year in question, the assessee's house was owned by him, so the statutory exception applied. The contrary view taken in earlier decisions could not survive the retrospective amendment.

Conclusion: The allowance was not exempt under section 10(13A); the answer was against the assessee and in favour of the Revenue.

Ratio Decidendi: Exemption under section 10(13A) is unavailable where the assessee occupies his own residential accommodation and has not actually incurred rent expenditure, particularly after the retrospective Explanation excluding such cases.

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