1996 (7) TMI 12

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.... in not taking the rent for the period November 1, 1975, to November 30, 1976, is not erroneous and prejudicial to the interests of the Revenue and that the Commissioner of Income-tax was not justified in invoking the provisions of section 263 of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal's view that the assessee is entitled to vacancy allowance when the property was not actually let out and was not in the occupation of the tenant is sustainable in law?" The assessee is an individual deriving income from house property. While completing the assessment for the assessment years 1976-77 and 1977-78, the Income-tax Officer accepted the income from house property shown by....

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....ribunal, therefore, held that if the vacancy allowance is granted, there would be no change in the income computed by the Income-tax Officer, originally, and, therefore, the order of the Income-tax Officer cannot be considered as erroneous and prejudicial to the interests of the Revenue. Accordingly, the Appellate Tribunal cancelled the order passed by the Commissioner of Income-tax under section 263 of the Act and allowed the assessee's appeal. Before us, learned senior standing counsel appearing for the Department submitted that the property during the relevant period was not vacant. The property was not let out to the tenant during that period. The property was in the occupation of the intending purchaser under an agreement to purchas....

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....rty income pertaining to the period from April 1, 1976, to November 30, 1976, was not disclosed. The income returned by the assessee was accepted by the Income-tax Officer, while completing the assessment for the assessment years under consideration. On a scrutiny, the Commissioner of Income-tax came to the conclusion that the property is not occupied by the tenant and there is no relationship of landlord and tenant between the intending purchaser and the owner of the property. Therefore, in the present case, there is no question of allowing any vacancy remission as contemplated under section 24(1)(ix) of the Act. Hence, according to the Commissioner of Income-tax, the order passed by the Income-tax Officer is erroneous and prejudicial to t....