Self-contained residential flats may each be treated as separate units for deduction where common facilities do not destroy independence.

Self-contained apartments let out for residential occupation may each qualify as separate residential units for deduction under the second proviso to section 23(1) of the Income-tax Act. The presence of common amenities, including a single entrance, common passage, municipal tap connection and shared electricity arrangement, did not negate the independent character of each flat because each provided complete residential accommodation. On the facts, the building comprised six distinct residential units, so the deduction was available in respect of each unit and the disallowance was set aside.

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Issues: Whether each self-contained flat in a building could be treated as a separate residential unit for the purposes of the deduction under the second proviso to section 23(1) of the Income-tax Act, 1961.

Analysis: The building consisted of six distinct apartments let out to different tenants for residential occupation. The presence of common amenities such as a single entrance, common passage, municipal tap connection, and a common electricity arrangement did not destroy the independent character of each apartment, as each unit provided complete residential accommodation to the occupants. A lodge-type use was distinguished from family residence in separate apartments. The statutory expression contemplated a building comprising one or more residential units, and the factual position showed six such units.

Conclusion: Each apartment was a separate residential unit, and the assessee was entitled to the deduction in respect of each unit.

Final Conclusion: The disallowance was set aside and the assessee succeeded on the claim under the second proviso to section 23(1).

Ratio Decidendi: Common facilities in a building do not negate the independent existence of self-contained residential apartments let out for family residence, and such units may each be treated as separate residential units for the statutory deduction.

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