House rent allowance exemption upheld where self-occupied residence and tax on annual letting value did not defeat relief.

House rent allowance was considered under section 10(13A) read with rule 2A where a judge occupied his own house and paid tax on its annual letting value. The Court treated the issue as covered by its earlier decision and held that this circumstance did not prevent the allowance from qualifying for exemption. On those facts, the house rent allowance was not includible in taxable income and was exempt under the governing provision.

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Issues: Whether house rent allowance received by the assessee was liable to be included in taxable income or was exempt under section 10(13A) of the Income-tax Act, 1961 read with rule 2A of the Income-tax Rules, 1962.

Analysis: The allowance was received by a judge who occupied his own house and paid tax on the annual letting value of the self-occupied property. The question turned on whether this circumstance amounted to expenditure within the meaning of the exemption provision. The Court followed its earlier decision on the same point and treated the matter as covered by that reasoning.

Conclusion: The house rent allowance was not liable to be included in taxable income, and the question was answered against the revenue and in favour of the assessee.

Ratio Decidendi: Where the governing exemption provision is satisfied on the facts, house rent allowance is not includible in taxable income merely because the assessee occupies his own house and bears tax consequences of such occupation.

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