Holding

The Supreme Court held that the property, not being let during the previous year, was not eligible for deductions under Section 23(1) proviso or Section 24(1)(ix), and only the insurance premium deduction was allowable.

Summary

The appellant, a liquidator of Mahamudabad Properties Ltd., owned a building at 3 Gun Foundry Road that had been released by the Government in December 1960 in a dilapidated condition. In its 1962-63 return it claimed an annual value of Rs.1,23,672, a vacancy remission, and deductions for insurance premium and municipal taxes. The Income Tax Officer held the property was not habitable and excluded it from Section 22, denying all deductions; the Appellate Assistant Commissioner allowed the annual value and deductions, but the Income Tax Appellate Tribunal reversed, holding the property fell outside Section 22 and disallowing the deductions. The Calcutta High Court, on reference, held the property did have an annual value but allowed only the insurance premium deduction, rejecting vacancy remission and municipal tax deductions. The Supreme Court affirmed that the property was not let during the previous year, so Section 24(1)(ix) and the proviso to Section 23(1) could not be invoked, and upheld the High Court's limited deduction, dismissing the appeal.

Issues considered

Whether the building at 3 Gun Foundry Road possessed an annual value within the scope of Section 22 of the Income Tax Act, 1961.
Whether deductions claimed under the proviso to Section 23(1) (municipal taxes) and Section 24(1)(ix) (vacancy remission) are permissible.
Whether the High Court could direct the Appellate Tribunal to take into account the annual value of the property in a reference proceeding.

Legislation cited

Income Tax Act, 1922s. 9(1) paragraph 7
Income Tax Act, 1961s. 22, s. 23(1), s. 24(1)(ix), s. 24(2), s. 260

Subjects

Income TaxSection 22Section 23Section 24House propertyAnnual valueVacancy remissionMunicipal taxesReference jurisdictionAppellate Tribunal

Judgment

428

A LIQUIDATOR OF MAHAMUDABAD PROPERTIES (P) LTD.
•
v.
COMMISSIONER OF INCOME TAX, WEST BENGAL II,
CALCUTTA
April 9, 1980
B [N. L. UNTWALIA AND R. S. PATHAK, JJ.]
Income Tax Act, 1961, Sections 22 and 23-Computation of Income frotn
house property-Building not in a habita/Jle condition after it was released by
Gol·crnment consequent to derequisitioning-Assessee claiming remission in·
•
the computation of income of the entire annual value and also deductions on
account of insurance premium and municipal taxes relating to the property-
Permissibility of re1nission and deductions claimed-Competency of the High
c Court to give a direction to tile Appellate Tribunal, enabling the Revenue to
tax income from the property, when the Revenue jailed to ask for a refertnce·
against Appellate Tribunal's decision-Nature of High Court's polver in
a reference case.
The appellant-assessee, in his income tax return for the assesssment year
1962-63 (for which the previous year was the calendar year 1961) r'cited
D that the annual value of the building derequisitioned by the Govt. on 26-12-1960·
was Rs. 1,23,672/-. However on the ground that the building had remained:
vacant throughout the previous year, the assessee claimed a remission in the
computation of the income of the entire annual value. The assessee als0t
cJairned a deduction on account of insurance premium and municipal taxes
relating to the property.
The lncame Tax Officer took the view that ~e property was not in a
E habitable condition and did not admit of letting and therefore no question
e.rose of applying the provisions of the Income Tax Act relating to the com-
putation of income from property. Accordingly, be held that the annual value-
as well as the vacancy claim had to be ignored. The assessee appealed to
the Appellate Assistant Commissioner who held that although the property ha<L
remained vacant, it possessed an aunue.l value and should be considered for
assessment. On that view, he a1lo\.ved the deductions claimed by the assessee.
F In second appeal, the Incon1e Tax Appellate Tribunal favoured the view
taken by the Income Tax Officer and e.ccordingly held that the claim to deduc-
tions made by the assessee must fail. The Tribunal, in other words, affirmed
that the property fell outside the scope of s. 22 of the Act and, consequently,
denied the deductions. The Revenue appeared satisfied with the order Of
Appellate Tribunal. But, at the instance of the assessee a reference was.
made to the High Court. The High Court was of the opinion that the •
G Appellate Tribunal had misconceived the la\v in holding that because the
property was in a state of disrepair it did not possess an annual value. As
regards the assessee's claim to the specified deduction, it held that while the
insurance premium paid by it could be allowed, there was no merit in the
1
claim on account of vacancy remission and payments of municipal taxes,
Hence the appeal by special leave to this Court.
H Dismissing the appeal, the Court,
HELD : I. Whether the High Court was right in including a direction to
the Appellate Tribunal to take into account the annual value of the property
LIQUIDATOR MAHAMUDABAO PROPERTIES V. C.I.T. 429

will depend on the appreciation of the true scope of the reference taken to A
the High Court. The question referred to the High Court was rooted In the
fundamental submission of the assessee that the property possessed an annual
value for the purpose of Section 22 and it was, therefore, entitled to the
vacancy remission end other deductions claimed by it. The frame of the
question indicates that it has two parts, whether the Appellate Tribunal was
right in holding that in computing the income from property the premises
>
3, Gun Foundry, possessed an annual value and whether the Appellate Tri- a
bunal '\\'as right in disallowing the vacancy remission and other deductions
in resoect of that property. [434C-E]
• Unless the property fall within the scope of Section 22 there was no occa-
sion for considering the assessec's claim to the deductions. The. High Court
also, when considering the reference, examined the question in its bifurcated
character. But although bifurcated. the thrust of the question was directed C
to the consideration of the deductions claimed by the e.ssessee. Whether the
property possessed an annual value was necessary to determine solely for the
purpose of considering the claim to deductions. Unless the assessee was in-
•terested in those deductions it. would not have asked for a finding that the
property possessed an annual value. The High Court. wes, therefore, right
in examining both parts of the question and in determining whether the pro-
perty had an annual value and the deductions claimed were permissible. D
[434E-G]
The High Court had to consider the first part of the question because that
was the very case of the assessee throughout from the earliest stage of the
proceeding. The need for the determination whether the property has an annual
value arises only if it is found that on the tern1s of the statute the assessee
is otherwise entitled to the deductions clairned by him. If those deductions
are not permissible under the relevant section, no question arises of examin- E
ing whether the property has 0n annual value. Viewed in that light, the
determination of the question whether the property has an annual value faJLq_
into its proper place. [434G-H, 435A]
2. It is not open to the Revenue to contend that even though the claim
to deduction must otherwise fail, the question whether the property has an
annual value must still be considered. If the Revenue intended that the High F
Court should determine whether Qli property had an annual value as a ques~
tion iOOependent of its finding on the admissibility of the deductions, the
Revenue should have applied to the Appellate Tribunal for a reference to the
High Court accordingly. It did not ask for a reference and, therefore it is
not entitled to raise that contention now. [435A-C]
• However, the only way of looking o.t the case, is whether on the assump- G
. tion that the property has an annual value >1nd falls within the scope ot
Section 22, the assessee is entitled to the deductions under Sections 23 and
24. If he is entitled to any of those deductions, then in order to establish
the foundation in which the deductions can be rooted it will be necessary to
determine whether the property possesses an annual value. That is what the
High Court did, and the observations made by it must be construed accor-
dingly. It may be that the deduction to which the assessee is found entitled H
runs to a far smaller figure than the annual value property attributable to
the property. In that event the consequence will be a net annual value of
some significance. ~-\nd this will be the consequence notwithstanding that
430 SUPREME COURT REPORTS [1980] 3 s.c.11..

A the reference is at the assessee.'s instance and no reference at all has been
brought by the Revenue. The result appears anomalous, but aft.er all it is
for the assessee to choose whether or not he wishes to take a reference to the
High Court, and if he is found entitled to even one of the 4eductions claimed
by him and effect cannot be given to that claim without the annual value
of the property being computed he has only to thank himself. [435C,F]

B 3. The High Court, on a reference before it, does not act as a court of
appeal. The jurisdiction is advisory and no more. The High Court is
empowered to decide the question of law referred to it, and to return its answer
to the Appellate Tribunal. .The Appellate Tribunal then takes up the appeal
and disposes it of conform.ably with the answer returned by the High Court.
It is not part of the jurisdiction of the High Court to interlere and modify
or set aside the appellate order of the Tribunal. [435F-H]
c 4. The proviso to Section 23(1) of the Income Tax Act, 1961 can be
availed of only if the property is in the occupation of a tenant. It would
seem so on the language of the proviso. The assessee does not rest his claim
on any other provision of law. Jn the circumstances, the High Court is
right in denying the claim in respect of municipal taxes. [436G-H]
5. The provisions of the Income-Tax Act relating to the charge on income
D apply in relation to a specific assessment year end the provisions of the Act
providing for the computation of the chargeable income (which includes taking
into account permissible deductions in the computation of the income charge-
able under different heads) apply, in the absence of anything to the contrary,
in relation to the relevant previous year. The tolal incon1e of the previous
year needs to the con1puted, and the different provisions relating to the com·
putation o.f income must be read and applied in the context of the facts and
E circumstances obtaining· during that year, unless the context suggests the con-
trary. Consequently, \Vhen reading s.24(2)(ix) of the Income Tax Act, 1961
which speaks of property which is let and which \\'as vac;:ant during a part of
the year, the Court must read it to mean property which was Jet during the
previous year and was vacant during a part of the year. It cannot refer to
property which was not let at all during the previous year. [437D"E]
F In the present case, there is no evidence to show that it was ever given
out by the assessee that the property was available for letting. The e.ssessee
is not entitled to the deductions claimed by it in respect of municipal taxes
and a vacancy remission. [437F]
_(
Maharajadhiraja of Darbhanga. v. Com1nissioner of Income Tax, Bihar and
Orissa, A.I.R. 1931 Patna 223; distinguished.
G CIVIL APPELLATE JURISDICTION: Civil Appeal No._ 2183 of
1972.
Appeal by Special Leave from the Judgment and Order dated
28-7-1970 of the Calcutta High Court in Income Tax Reference No.
45 of 1969.
e F. S. Nariman and M. M. Kshatriya for the Appellant.
aind
S. T. Desai, K. C. Dua, Miss A. Subhashini for the Respondent
LIQUIDATOR MAHAMUDABAD PROPERTIES v. c.I.T. (Pathak, J.) 431

S. Chaudhary. D. N." Gupta and T. A. Ramachandran for the A.
Respo'ndent Intervener.
The Judgment of the Coun was delivered by
PATHAK, J.-This appeal by special leave is directed against the
judgment of the Calcutta High Court on a question concerning the
computation of income from house property under the Income-tax a!
Act, 1961.
• The assessee, a private limited company, is !he owner of the
property described as 3, Gun Foundry Road. Originally it housed
a jute baling press. The property was requisitioned by the West
Bengal Government in 19 51. It was released to the asses see on
December 26, 1960, after being used for housing refugees. Evidently,
c
the building had not received the care it deserved, for when the
assessee resumed possession he found it in a sorry state.
The assessee filed an income-tax return for the assessment year
1962-63 (for which the previous year was the calendar year 1961),
and the return recited that the aunual value of the building was D
Rs. 1,23,672. However, on the ground that the building had remained
vacant throughout the previous year, the assessee claimed a remission
in the computation of the iilcome of the entire annual value. The
assesisee also claimed a deduction on account of insurance premium
and municipal taxes relating to the property.
E.
The Income-tax Officer took the view that the property .was not
in a habitable condition and did not admit of letting and therefore
ilo question arose of applying the provisions of the Income Tax Act
relating to the computation of income from property. Accordingly,
he held that the aunual value as well as the vacancy claim had to be
ignored. The assessee appealed to the Appellate Assistant Commis- F.
sioner, who held that although the property had remained vacant, it
possessed an annual value and should h~ considered for assessment.
On that view, he allowed the deductions claimed by the assessee. In
second appeal, the Income Tax Appellate Tribunal favoured the view
taken by the Inoome Tax Officer and accordingly held that the claim
to deductions made by the assessee must fail. The Tribunal, in other G
words, affirmed that the property fell outside the scope of S. 22 of the
Act and, consequently, denied the deductions.
The Revenue appeared satisfied with the order of the Appellate
Tribunal. But, at the instailce of the assessee, a reference was made
to the High Court at Calcutta on the following question :-
"Whether on the facts and in the circumstances of the
. case and on the interpretation of sections 22 and 23 of the
432 SUPREME COURT REPORTS [1980] 3 s.c.1..
'
A Income-tax Act, 1961 the Tribunal was right in holding
that iu computing the income from property the l;lonafide
annual value of the property at 3, Gun Foundry Road,
Calcutta has not to be taken and in disallowing the vacancy
remission and other deductions in respect of the aforesaid
property ?"
B
The High Court was of opinion that the Appellate Tribunal had
misconceived the law in holding that because the property was in •
a state of disrepair it did not possess an annual value. As regards
the assessee's claim to the specified deductions, it held that while the
insurance premium paid by it could be allowed, there was no
c merit in the claim on account of vacancy remission and payment of .
municipal taxes. Accordingly, the High Court recorded :-
"On the first part of the question we hold that the Tri-
bunal was wrong in holding that there was no annual value
of this property No. 3, Gun Foundary Road and that it was
D o.utside the scope of section 22 of the Income-tax Act,
1961. We hold and we are of the opinion that this pro-
perty has an annual value in the facts and circumstan~ of
the case and it should be taken into account in the light
of the principles and observations we have made above.
We therefore set aside that part of the order of the Tribu-
E nal and answer the question accordin&Jy. The answer to
this first part of the question is in the negative. The ans-
wer to the second part of the question folloWIS from the
answer to the first part of the question and is that the only
deduction in the facts and circumstances of the present
. reference which the assessee can get is the deduction for
insurance premium paid. We hold further on this part of
the question that the other deductions, namely, (a) vacancy
remission and (b) municipal taxes are not permissible and
the assessee is not entitled to claim them in the present
reference. We answer the second part of the question
accordingly.
G
The Tribunal, therefore, will dispose of the case confor-
mably to this judgment and the interpretation of the prin-
ciples enunciated herein under section 260 of the Income-
tax Act, 1961."

H At the outset a serious controversy arose before us on the point
whether the High Court was right in including a direction in its judg-
ment that the Appellate Tribunal should take into account its finding
LIQUIDATOR MAHAMUDABAD PROPERTIES V. C.I.T. (Pathak, ].) 433

that th" property possessed an annual value. The assessee says that
when the Appellate Tribunal had held that the property did not fall
within the scope of s. 22, it was for the Revenue, in case it desired
tci charge the assessee on income from this property, to apply for a
) ~"forence to the High Court. It is urged that the Revenne having
omi'ted to do so, it was not open to the High Court to make an
order enabling the Revenue to tax any income from that property. On
• behalf of the Revenue, the submission is that inasmuch as the assessee
had taken the case in reference to the High Court for an adjudication
on the deductions claimed by it the point whether the property pos-
sessed a·n annual value and its income was chargeable was directly
raised by the assessee itself, and therefore, the High Court was right c
in rendering a decision on this point.
"Income from house property" is one of the heads into which
different categories of income included in the total income have been
classified. For the purpose of computing "income from house pro-
perty", a code of provisions is incorporated in ss. 22 to 26 of the
Act. S. 22 declares that the annual value of property consisting of
D
buildings or lands appurtenant thereto in the ownership of the
assessee, excepting such portions of the property occupied for any
business or profession carried on by him of which the profits are
chargeable to income tax, shall bo chargeable to income tax as "in-
{ come from house property". The annual value is determined after E
making a deduction on account of municipal taxes. The income
from house property is then subject to the deductions set forth in
Sec. 24. The deductions are made for th·~ purpose of computing the
net figure of the income from property.
In order to decide whether the High Court was right in including
F
a direction to the Appellate Tribunal to take into account the annual
value of the property, it is necessary to apprechtte the true scope of
the reference taken to the High Court. The Income Tax Officer bad
fo\Jnd that the property, having regard to its condition, was not cap-
able of being let to tenants and therefore the gross value and the
deductions claimed had to b~ iguored. The assessee was aggrieved G
by that finding. It must be rememb~red that in its return the assessee
had indicated that the property possessed an annual value of
Rs. 1,23,672 unless the property had an annual value, it believed, it
could not be entitled to the deductions claimed by it. In appeal
before the Appellate Assistant Commissioner, its· case was that the
• property could not be ignored for the purposes of the Income-tax B
Act. The contention was accepted by Appellate Assistant Commis-
sioner, who held that the annual value of the property could not be
434 SUPREME COURT REPORTS [1980] 3 s.c.11..

A
ignored. and forther that the vacancy remission and other deductions
claimed by the assessee were admissible. When the Revenue pro-
ceeded in appeal to the Appellate Tribunal it urged that the assessee
was not entitled to the deduction claimed in respect of the property.
The Appellate Tribunal considered the evidence relating to the condi-

• tfon of the building, and was of opinion that the building was not i'n
a habitable condition and it could not be said that the property could
be reasonably Jet out at any particular annual value. In its opinion,
the property fell outside the scope of Section 22 and, therefore, the
•
Income Tax Officer was right in ignoring the property altqgether and
in not computing any profit or loss in respect of it. The Appellate
c Tribunal set aside the order of the Appellate Assistant Commissioner
and restored the order of the Income Tax iOlficer. It was m the
context of this train of proceedings that the assess·~e now took the
case in reference to the High Court. The question referred to the
High Court was rooted in the fundamental submission of the assessec
that the property possessed an annual value for l!he purpose of Sec-
D tion 22 and it was, t!rerefore, entitled to the vacancy remission and
other deductions claiimd by it. The frame of the question indicates
that it has two parts, whether the Appellate Tribunal was right in hold-
ing that in computing the income from property· the premises 3, Gun
Foundry, posses9~d an annual value and whether the Appellate Tri-
bunal was right in disallowing the vacancy remission and other deduc-
E tions in respect of that property. Plainly, unless the property fell
within the scope of Section 22 there was no occasion for consideri'ng
the assessee's claim to the deductions. The High Court also. when
I
considering the reference, examined the question in its bifurcated
character. But although, bifurcated, the thrust of the question was
directed to the consideration of the deductions claimed by the assessre.
' Whether the property possessed an annual value was necessary to
determine solely for the purpose of considering the claim to deduc-
tions. Unless the assessee was interested in those deductions it would
not have asked for a finding that the property possessed an annual
value. The High Court was, thev~fore, right in examining both parts
G of the question and in determining whether the property had an
annual value and the deductions claimed were permissible. The
assessee can have no quarrel with the High Court considering the
first part of the question, becaure that was the very case of the
assessee throughout from the earliest stage of the proceeding. From
what has gone before it is apparent that the determination whether
H the property has an annual value arises only if it is found that on
the terms of the statute the assessee is otherwise entitled to the deduc-
tiom; claimed by him. If those deductions are not permissible under
t LIQUIDATOR MAHAMUDABAD- PROPERTIES V. C.I.T. (Pathak, J.) 435

the relevant section, no question arises of examining whether the pro- A
perty has an annual value. Viewed in that light, the determination
of the question whether the property has an annual value falls into
its proper p\ace. It cannot be contended that even though the claim
to deductions must otherwise fail, the questiou whether the property
• has an annual value must still be considered. Such a contention is
,. not ~pen to the Re\•~nue. If the Revenue intended that the High
Court should determine whether the property had an annual value
• as a question independent of its finding on the admissibility of the
deductions, the Revenue should have applied to the Appellate Tri-
bunal for a reference to the High Court accordingly. It did not ask
for a reference and, therefore it is not entitled to raise that conten- c
tion now. It seems to us that there is ol:ily one way of looking at
the case, and that is Whether on the assumption that the property
has an annual value and falls within the scope of Section 22, the
assessee is ~ntitled to the deductions under Sections 23 and 24. If
he is entitled to any- of those deductions, then in order to establish
the foundation in which the deductions can be rooted it will be neces- D
sary to determine whether the property possesses an annual value.
That is what the High Court did, and the observations made by it
must be construed accordingly. It may' be that the deduction to
which the assessee is found entitled runs to a far smaller figure than
the annual value property attributable to the p,roperty. In that event
I the consequence will be a net annual value of some significance. E
And this will be the consequence notwithstanding that the reference
is at the ass>;:s.see's instance and no reference at all has been brought
by the Revenue. The- result appears a,nomalous, but after all it is
for the assessee to choose whether or not he wishes to take a refer-
ence to the High Court, and if he is found entitled to even one of
1he deductions claimed by him and effect cannot be given to 1hat F
clainl without the annual value of the property being computed he ba8
only to thank himself.
At the same time, we must point out that the High Court, after
holding that the property has an annual value, bas erred in stating
that it sets aside that part of the order of the Appellate Tribunal. G
The High Court, on a reference before it, does not act as a court of
appeal. The jurisdiction is advisory and no more. The High .Court
is empowered to decide the question of law referred to it, and to
return its answer to the Appellate Tribunal. . The AppeHate Tri-
bunal then takes up the appeal and disposes it of confurmably with
the answer returned by the High Court. It is not part of the juris- B
diction of the High Court to interfere and modify or set aside the
appellate order of the Tribunal. _
8-289SCI/80
436 SUPREME COURT REPOllTS [1980] 3 s.c.R.

A~ has been said earlier, the High Court considered both parts
of the question referred to it, whether the property possessed an
a'nnual value and whether the deductions claimed by the assessee
were admissible. It examined first whether the deductions were
admissible. It found that the amount of Rs. 689 paid on account '
of fire insurance premium in respect of the property was deductible "
B
from the annual value under s. 24(1)(ii). Regarding the claim under
s. 24( 1)(ix) on account of vacancy remission, it disallowed the deduc-
tion on the ground that the property was not let during the previous
year. The claim to deduction under s. 23 of the municipal taxes paid
in respect of the property was also rejected in the view that the muni·
c cipal taxes could be deducted only if the property was in the occu-
pation of a tenant. The High Court then turned to the fundam~ntal
question whether the property possessed an annual value for the pur-
pose of s. 22, and held that merely because the building was in a
state of disrepair it could not be predicated that it had no annual
value. In the result, on the question referred by the Ap~llate Tri-
D bunal it returned the opinion that the property possessed an annual
value and that the assessee was entitled to a deduction in respect of
insurance premium only.
In this appeal, the only question is whether the High Court is
right in holding that the assessee is not entitled to any deduction on
account of municipal taxes and the vacancy remission claimed by
it.
The claim to the deduction of municipal taxes is made under the
proviso to s. 23 (1). The proviso reads :
"Provided that where the property is in the occupation
F
of a tenant, the taxes levied by any local authority in res-
pect of the property are under the Jaw authorising such levy,
payable wholly by the owner, or partly by the owner and
partly by the tenant, a deduction shall be made equal to
· the part, if any, of the tenant's liability borne by the
owner."
G It is immediately apparent that the proviso to s. 23(1) can be
availed of only if the property is in the occupation of a tenant. It
would seem so on the language of the proviso. The assessee does
'not rest his claim on any other provision of law. In the circumstan-
ces, the High Court is right in denying the claim in respect of muni-
H cipal taxes.
The next deduction claimed requires the consideration of s. 24( 1)
{ix) of the Act.
LIQUIDATOR MAHAMUDABAD PROPERTIES V. C.I.T. {Pathak, /.) 437

S. 24(1) (ix) reads: A
"24(1) Income chargeable under the head 'Income
from house property' shall, subject to the provisions of sub-
section (2), be computed after making the following deduc-
• tions, namely
xx xx xx xx xx B

(ix) Where the property is let and was vacant during a
part of the year, that part of the annual value which is
proportionate to the period during which the property is
wholly unoccupied or, where the property is let out i'n parts,
that portion of the annual value appropriate to any vacant c
part, which is proportionate to the perlod during which such
part is wholly unoccupied ...... "
The question is whether the property, 3 Gun Foundry Road, which
admittedly has remained vacant since December 26, 1960 can attract
s. 24(2) (ix). It is plain that it cannot. The provisions of the In- D
come-tax Act relating to the charge on income apply in relation to
a specific assessment year and the provisions of the Act providing
for the computation of the chargeable income (which includes taking
into account permissible deductions in the computation. of the income
chargeable under different heads) apply, in the absence of anything
to the contrary in relation to the relevant previous year. The total E
income of the previous )'~ar needs to be computed, aod the different
provisions relating to the computation of income must be read and
applied in the context of the facts and circumstances obtaining during
that year, unless the context suggests the contrary. Consequently,
when readings. 24(2) (ix) which speaks of property which is let and
which was vacant during a part of the year, we must read it to mean F
property which was let durin: the previous year and was vacant dur-
··cl ing a part of the year. It cannot refer to property which was not
let at all during the previous year. In the presenti case, there is no
evidence to show that it was ever even given out by the assessee that
the property was available for letting. We were referred to Maha-
G
rajadhiraja of Darbhanga v. Commissioner of Income-tax, Bihar und
Orissa, (') where it was observed by the Patna Hi~ Court that s. 9
(1) .paragraph 7 of the Income Tax Act, 1922 could be invoked i'n
a case where a house not in the occupation of the owner was habi-
tually let to tenants and the vacancies referred to are vacancies bet-
ween the different tenancies, or a house thou&Ji not let is dismantled H
and shut up by the owner. We have carefully read the judgmeht
(I) A.T. R. 1931 Patna 223.
438 SUPREME COURT REPORTS [1980] 3 s.c.R.

-A delivered by that High Court, and it appears that the observation is
a mere obiter. The actual point for decision was in fact quite diffe-
rent. It was a case where the assessee, who owned several houses
kept them furnished and open for his residence and never let them
to any tenant, and he did not occupy some of them during the relevant
previous year. He claimed a vacancy remission in respect of them.
•
B The High Court, in our opinion, rightly rejected the claim. It may
also be pointed out that the statutory provision cousidered there was
materially different from the one before us.
In our judgment, the assessee is not entitled to the deductions
claimed by it in respect of municipal taxes and a vacancy remission.
c The ~gh Court is right in its view in respect of this part of the
case.
The appeal is dismissed. There is no order as to costs.

S.R. Appeal dismissed.