TaxTMI 
TaxTMI 
1963 (7) TMI 96
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....n 66(1) of the Income-tax Act, 1922 (XI of 1922), by the Income-tax Appellate Tribunal, Delhi, is common to both the references. That question is the only question in the first reference and is the third question in the second reference. The other two questions in the second reference are in these terms : "(1)Whether on the facts and in the circumstances of the case, the property at No. 7, Prithviraj Road, New Delhi, valued at ₹ 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. (Bui....
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....ase (Supra) was in a matter of the present assessee. The only matter now left for determination is the first question in the first reference which is the third question in the second reference. It will be, therefore, proper to briefly set out the facts in both these references Wherein the question has been referred for our decision. The facts in both the references are common and so far as they are necessary for our purposes are given below: The assessee, Sardar Daljit Singh, is an individual. He owns half share in a building situate in Connaught Circus, New Delhi, known as the Regal Building. The owner of the other half building is the Hindu undivided family headed by his brother Sardar Bhagwant Singh. They are the sons of Sir Sobha Sing....
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....d 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 and the Tribun....
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....nable steps to institute legal proceedings for the recovery of the unpaid rent or satisfies the Income-tax Officer that legal proceedings would be useless; and (e)the annual value of the property to which the unpaid rent relates has been included in the assessed income of the year during which that rent was due and income-tax has been duly paid on such assessed income........" Section 2(15) of the Income-tax Act defined "total income" and is in these terms: " 'total income' means total amount of income, profits and gains referred to in sub-section (1) of section 4 computed in the manner laid down in this Act." Section 3 is the charging section and is in these terms : "Where any Central Act enact....
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....d to the whole or any part of the income of any class of persons. (2) Where, by reason of any portion of an assessee's salary being paid in arrears or in advance, or by reason of his having received in any one financial year salary for more than twelve months or a payment which is under the provisions of sub-section (1) of section 7 a profit in lieu of salary, his income is assessed at a rate higher than that at which it would otherwise have been assessed, the Central Government may grant the appropriate relief. (3) After the commencement of the Indian Income-tax (Amendment) Act, 1939, the power conferred by sub-section (1) shall not be exercisable except for the purpose of rescinding an exemption, reduction or modification already ....
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....he 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 n....