TaxTMI 
TaxTMI 
1963 (7) TMI 96
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....d, New Delhi, valued at Rs. 1,40,000 and given to S. Bhagwant Singh by his father on the partition of the family belonged to S. Bhagwant Singh in his individual capacity? (2)Whether on the facts and in the circumstances of the case, the share of S. Bhagwant Singh in the profits of the firms styled M/s. Sir Sobha Singh & Co. (Builders), Nagpur and M/s. Narbada Construction Co. as well as the salary paid by the former company was the income of S. Bhagwant Singh in his individual capacity?" The first and the third questions in the first and the second references respectively is as follows : "Whether on a true interpretation of the Finance Department's Notification No. 878-F (Income-tax) dated March 21, 1952, the assessee was entitled in computing the income from house property under section 9, to a deduction for the unabsorbed irrecoverable rent of the preceding year not exceeding one year's rent?" So far as the first and the second questions in the second reference are concerned it is conceded by the learned counsel for the assessee that they stand concluded by two decisions of this court in S. Bhagwant Singh v. Commissioner of Income-tax [1960] 38 ITR....
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.... deduction of the unabsorbed irrecoverable rent was made for the years 1953-54 and 1954-55. The relevant amounts are Rs. 41,129 for 1953-54 and Rs. 20,249 for 1954-55. The contention before the department as well as before the Tribunal was that the balance of the unabsorbed irrecoverable rent which had not been and could not have been allowed as a deduction in the earlier year should be allowed as a deduction in the subsequent years. In other words, it was urged that in each of the years concerned the assessee was entitled to deduct one year's rent on account of irrecoverable rent in terms of the notification referred to above. This contention was negatived by the department as well as by the Tribunal on the short ground that there was no provision in the notification whereby any balance of unabsorbed irrecoverable rent could be carried forward and deducted against the next year's income. The assessees in the respective references made applications to the Tribunal under section 66(1) of the Income-tax Act requiring the Tribunal to refer to this court the questions of law which, according to the assessee, arise out of the Tribunal's order. These applications were granted....
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....shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually." Section 9, omitting the portion that is not necessary for our purposes, is in these terms : "(1)The tax shall be payable by an assessee under the head 'income from property' in respect of the bona fide annual value of property consisting of any buildings or lands appurtenant thereto of which he is the owner other than such portions of such property as he may occupy for the purposes of any business, profession or vocation carried on by him the profits of which are assessable to tax........ (2)For the purposes of this section, the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year:.........." Section 60 is a section in pursuance of which the aforesaid notification has been issued. This section is in these terms : "60. ....
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....income does not subsequently accrue on account of the default of the tenant, the assessee should get relief. This relief is limited to one year's rent, that is the maximum, though the relief will be granted only with regard to the rent which has actually become irrecoverable and that may be in some cases less than one year's rent and in others the whole year's rent. The words in the notification "such part of income in respect of which the tax is payable under the head 'property' as is equal to the amount of rent payable for a year" leave no manner of doubt that at the time when the relief is granted only the amount equal to the rent payable in a year is to be deducted. This would obviously indicate that the balance of the rent due after this deduction would lapse and would not fall within the exemption notification. I am further fortified in this conclusion from the fact that wherever in the Income-tax Act relief allowed under the Act can be carried forward into the next year or years in case where the relief in the nature of things cannot be allowed wholly in a particular year, a specific provision has been made. (See in this connection the provisions relating....