Whether Benefits of Section 23(2) Available to HUF?

• The assesses is a Hindu Undivided Family (HUF for short). It derived income from house property. The claim of assesses for deduction u/s. 23(2) of the I.T. Act was rejected by Income Tax Assistant Commissioner (Assessment).
• In further appeal, the learned CIT (A) also rejected the claim of the assesses. According to CIT (A), the benefits envisaged by Section 23(2) were available only to an individual and not to HUF. For this proposition, the CIT (A) relied upon the decision of J & K High Court in the case of Commissioner of Income Tax vs. Mohd. Amin Tyamboo reported in: 125 ITR 375.
• However, in further appeal, the Income Tax Appellate Tribunal relied upon the decision of Income Tax Appellate Tribunal, Delhi Bench (SMC) in the case of ITO vs. Tarlock Singh & Sons reported in 29 ITD 139 and held that the benefit given u/s. 23(2) would be available to HUF
• However, in further appeal, the Income Tax Appellate Tribunal relied upon the decision of Income Tax Appellate Tribunal, Delhi Bench (SMC) in the case of ITO vs. Tarlock Singh & Sons reported in 29 ITD 139 and held that the benefit given u/s. 23(2) would be available to HUF.
• SECTION 23(2)

Where the property consists of –

1.  a house or part of a house in the occupation of the owner for the purposes of his own residence, –
2. which is not actually let during any part of the previous year and no other benefit therefrom is derived by the owner, the annual value of such house or part of the house shall be taken to be nil;
3. which is let during any part or parts of the previous year, that part of the annual value (annual value being determined in the same manner as if the property had been let) which is proportionate to the period during which the property is in the occupation of the owner for the purposes of his own residence, or, as the case may be, where such property is let out in parts, that portion of the annual value appropriate to any part which was occupied by the owner for his own residence, which is proportionate to the period during which such part is wholly occupied by him for his own residence shall be deducted in determining the annual value.
4.  Explanation. – The deduction under this sub-clause shall be made irrespective of whether the period during which the property or, as the case may be, part of the property was used for the residence of the owner precedes or follows the period during which it is let;

• Annual value how determined. –

1. Where the property consists of a house or part of a house which –
2.  is in the occupation of the owner for the purposes of his own residence; or
3. cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house or part of the house shall be taken to be nil.

Section 44A - Documents to maintain for maintenance of books of accounts

• The following documents should be maintained by the taxpayers to comply with the requirement of maintenance of books of accounts: