Section 23(1)(c) of the Income Tax Act

For computing income from house property, the Annual Letting Value (ALV) cannot be arbitrarily estimated by the Assessing Officer, but must be determined based on the Municipal ratable value of the property.

Taxing provisions must be strictly interpreted, avoiding constructions that create additional fiscal burdens or invoke unrelated statutes. When two interpretations are possible, courts should favor the taxpayer over the revenue.

A taxing statute must be strictly construed: the subject is not to be taxed unless the charging provision clearly and explicitly imposes the obligation, without room for intendment or implication. There is no equity about a tax, and nothing is to be read into or implied within the language used.

For the purpose of computing income from house property, the annual value under Section 23 must be determined even if the property is vacant or not actually let out, as the statutory phrase "property is let out" does not necessitate actual letting.

Disallowance under Section 14A for interest expenditure is not justified if an assessee uses its own interest-free funds for investments generating exempt income, and borrowed funds are entirely utilized for business purposes, without evidence of diversion to earn tax-free income.

If a property is not let out at all, notional income must be computed, and the benefit of section 23(1)(c) (vacancy allowance) cannot be extended. However, section 23(1)(c) can apply to properties let out for two or more years that remain vacant for the entire previous year.

Exemption under sections 11/12 of the Act should not be denied on the basis of the principle of consistency if the facts in the present case are identical to earlier and subsequent assessment years. This applies even when there are allegations of violation of provisions of section 13 of the Act.

The principle of consistency mandates that if an assessee's facts in earlier and subsequent assessment years are identical to the year under consideration, they should not be denied exemption under sections 11/12 of the Act.

Ignorance of the law is no excuse, and individuals are presumed to know the law of the land. Courts interpret, not create, law, and such ignorance cannot justify delays in legal proceedings.

Where an assessee has sufficient own funds exceeding its investments, a presumption arises that investments were made out of interest-free funds, preventing disallowance of interest expenses.