TaxTMI 
TaxTMI 
1978 (12) TMI 5
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....t year, the godowns and rooms were let out to different persons, But during the accounting year they were vacant except two rooms which had been let out to two firms in which the assessee is interested. In the original assessment, the assessee returned an income from this property of Rs. 3,620 after deducting the vacancy allowance. This was accepted and the original assessment was completed on that basis. Subsequently, the officer reopened the assessment under s. 147(b). In the reassessment proceedings he included an annual letting value of the part ,of the property which was vacant throughout the year. The income on such basis was computed to be Rs. 24,053. He held that no vacancy allowance was to be given in respect of the property which ....
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....ty 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. Explanation.-The deduction under this clause shall be made irrespective of whether the period during which the property or, as the case may be, part of the property was vacant precedes or follows the period during which it is let. " The language of the clause indicates that the vacancy must be during a part of the year in question and not for the entire year. This aspect of the meaning and the content of the section is further emphasised by the latter part of cl. (ix) which provides for the calculation of the vacancy allowance of any part in proportion to the period ....
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.... or a State Government or the Central Government. " The difference in phraseology should be obvious. We called upon the counsel for the assessee and the counsel for the department to throw light on the objects and reasons of the Act, or the Notes on Clauses in order to highlight the reasons that led to the difference in language. They have placed before us the Bill in Part II, section 2 of the Gazette dated April 24, 1961, at p. 464, and the Notes on Clauses at pp. 474 and 475 of the same. The note on clause 23(ii) covers a case where the building is to remain unoccupied for the whole year. This, we find, is now taken care of by s. 23, cl. (3), of the Act, which is as follows : " 23. (3) Where the property referred to in sub-section (....
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....nt for which the property might reasonably be expected to let from year to year. These, it was observed, are deeming provisions based on the idea of hypothetical tenancy. The provisions were taken as indicative that the property had to be considered as it is, at the time of determination of its annual value. That decision, again, has no direct bearing on the question that we have to consider in the instant case. The matter is essentially one of first impression, and, on the language of the section, we are of the opinion that unless the vacancy occurred during a part of the year and did not last for the entire year, the relevant part of the section can have no application. In this view, we answer the question referred in the negative, i.e....