House-property exemption and reopening of assessment turned on escaped income and voluntary choice to live elsewhere.

Reopening under section 147(a) was upheld where house-property income had escaped assessment, following prior authority on identical facts. The court also held that exemption under section 23(3)(a) was unavailable because the assessee's vacant house was kept unused by choice while he stayed with his father in the same city; the statutory condition requires inability to reside in the property due to business or professional necessity. On those findings, the reference was decided against the assessee on both issues.

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Issues: (i) whether the Income-tax Officer was justified in reopening the assessment under section 147(a) of the Income-tax Act, 1961; (ii) whether the assessee was entitled to exemption under section 23(3)(a) of the Income-tax Act, 1961.

Issue (i): Whether the Income-tax Officer was justified in reopening the assessment under section 147(a) of the Income-tax Act, 1961.

Analysis: The assessment years involved were 1966-67 to 1968-69. The income from the house property was treated as having escaped assessment, and the reopening was upheld by the appellate authorities. The reference was decided in line with the earlier decision on identical facts, which had accepted the reopening as valid.

Conclusion: The reopening under section 147(a) of the Income-tax Act, 1961 was justified and the issue is answered against the assessee.

Issue (ii): Whether the assessee was entitled to exemption under section 23(3)(a) of the Income-tax Act, 1961.

Analysis: The assessee kept the house vacant while residing with his father in another house in the same city. The factual finding was that this arrangement was voluntary for convenience and not because the assessee, owing to business or profession, could not live in his own house. On that finding, the statutory condition for exemption was not satisfied.

Conclusion: The assessee was not entitled to exemption under section 23(3)(a) of the Income-tax Act, 1961, and the issue is answered against the assessee.

Final Conclusion: The reference was decided against the assessee on both questions, with the Revenue succeeding on the validity of reopening and denial of the claimed house-property exemption.

Ratio Decidendi: A vacant house property qualifies for exemption only where the assessee is unable, because of business or professional necessity, to reside in it; a voluntary choice to live elsewhere does not attract section 23(3)(a), and a reopening based on escaped assessment is sustainable on that basis.

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