1991 (4) TMI 66

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....lowance was to be made in an amount of Rs. 2,45,443 even though the rent loss on account of vacancy was to the tune of Rs. 3,49,588 ?" The assessee is a limited company and its major source of income is derived from letting out of immovable property. For the previous year ending March 31, 1973, admittedly, the rent receivable for the entire property was Rs. 14,17,735. There is no dispute that a part of the property remained vacant during the year and, because of that, the rent received was less by Rs. 3,49,580. The rent receivable being more than the annual value indicated in the municipal bills, the Income-tax Officer proceeded to compute the income on the basis of rent receivable to which the assessee had no objection. For arriving at ....

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....expression "annual value" was defined by section 23(1) as "rent receivable minus the taxes leviable". In this view of the matter, the Tribunal reversed the Appellate Assistant Commissioner's findings and restored the Income-tax Officer's order. The present question has been referred to us at the instance of the assessee. Mr. Mehta, learned counsel for the assessee, contends that what is permissible as deduction under section 24(1)(ix) is the proportionate value of the "gross annual value" of the property and not the proportionate amount of the "net annual value" as calculated by the Income-tax Officer and upheld by the Tribunal. In our view, this contention is misconceived. Section 24(1)(ix) does not speak of either "gross" or "net" annu....