TaxTMI 
TaxTMI 
1984 (6) TMI 29
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....lowance under section 24(1) of the Income-tax Act, 1961 ? The assessee constructed a building which was completed on December 30, 1968. The building has four floors. The ground floor and the first floor were let out to the State Bank of Travancore and they were occupied as from October 12, 1969, within the period relevant to the assessment year 1970-71. The other two floors were let out on April 1, 1971, and April 22, 1972, within the previous years relevant to the assessment years 1972-73 and 1973-74, respectively. With these two years we are not concerned in this case. For the assessment years 1970-71 and 1971-72, the assessee claimed vacancy remission, in terms of s. 24(1)(ix) of the I.T. Act, in respect of the two floors let out on Oct....
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....The same principle would apply in relation to a part or parts of the building where remission is claimed. The assessee had to prove that vacancy arose subsequent to the letting out of those parts. This argument was rejected by the Tribunal by its order dated February 24, 1978. Hence, the present question, at the instance of the Revenue. Before we read the relevant clause, it must be stated that there is no direct authority on the construction of this clause in regard to the points arising for decision. In Mahamudabad Properties P. Ltd. v. CIT [1980] 124 ITR 31 (SC), the Supreme Court stated that vacancy remission would not be available in a case where a building had not been let out during the year previous to the relevant assessment year.....
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....he Revenue contends that the Explanation is not intended to be retrospective. Sri Narayanan Poti, appearing for the assessee, submits that the Explanation is inserte ex abundanti cautela. He points out that it applies in terms to the instant case, not because it is retrospective, but because it is clarificatory of the law as embodied in clause (ix). It says that the law has always been so. Its object is to remove any doubt as to the meaning of clause (ix). Clause (ix) says where the property is let and was vacant during part of the year...... This part of the clause, as stated by the Supreme Court and by this court in the cases referred to above, shows that in order that the clause is attracted, the property in question must have been let ....
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....nnual value which is proportionate to the period during which the property is wholly unoccupied, or, in a case, where the property is let out in parts, that portion of the annual value appropriate to any vacant part which is proportionate to the period during which such part is wholly unoccupied. Where the whole property has been let out and a remission is claimed in respect of the period of vacancy, there is no difficulty in applying the first limb of the clause for the purpose of remission. As we have stated earlier, remission would be available whether the letting preceded or followed the vacancy. But where the property is let out in parts, and the benefit of the second limb of the clause is claimed, the question may arise as to what is....