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May 2012

Income from house property: Section 23(2) of Income-tax Act, 1961: Allowance for self-occupation u/s.23(2) is available for HUF also.

By K. B. Bhujle, Advocate
Reading Time 1 mins
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[CIT v. Hariprasad Bhojnagarwala, 342 ITR 69 (Guj.) (FB)]

The following question was considered by the Full Bench of the Gujarat High Court: “Whether the Appellate Tribunal is right in law and on facts in holding that the benefit of section 23(2) is available to a Hindu Undivided Family?”

The High Court held as under: “

(i) The benefit of relief in respect of self-occupied property u/s.23(2) of the Income-tax Act, 1961 is available only to the owner who can reside in his own residence. That means, the benefit of relief is available only to an individual assessee and not to an imaginary assessable entity.

(ii) A Hindu Undivided Family is nothing but a group of individuals related to each other by blood or in a certain manner. A Hindu Undivided Family is a family of a group of natural persons. The family can reside in the house, which belongs to the Hindu Undivided Family. A family cannot consist of artificial persons.

 (iii) There is nothing in the words used in section 23(2), which excludes its application to a Hindu Undivided Family.

(iv) The question is answered in favour of the assessee and against the Revenue.”

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