The main legal point established in the judgment is that the assessee must prove the irrecoverability of rent as required by Rule 4 to claim a deduction of unrealised rent under Section 24(1)(x) of the Income Tax Act, 1961.

( 1 ) THE following question requires our consideration under the Provisions of the income tax Act, 1961:"whether on the facts and in the circumstances of the case, the appellate tribunal was right in holding that the Provisions of Rule 4 were applicable to the assessee's case when there was no finding that the rents were proved to be lost and irrecoverable and the suit was still alive?"the year of assessment is 1978-79. The assessee claimed that a sum of Rs. 30,000/- being the rent, was not recoverable from its tenant gem enterprises. This sum of Rs. 30,000/- was the rent not paid during the relevant accounting year. The income-tax officer noted that a civil suit has been filed by the assessee for the recovery of the arrears of rent and the suit is still pending and therefore it was not established that the rents have become unrealisable. The commissioner of income-tax (appeals) affirmed this order. However, the appellate tribunal held that the fact that rent due from the tenant has become irrecoverable would in a majority of cases be known only in subsequent years and not the year during which the tenant has remained in occupation. For this, the decision of the Supreme Court in commissioner of Income Tax, Lucknow v Madho PD. Jatia, 105 ITR 179, was relied. The appellate tribunal therefore held that the assessee was not entitled for a deduction of Rs. 10,000/- in the first year, i. e. , 1977-78 but the same was allowable for deduction in the subsequent years and similarly the unrealised rent of 1978-79 (i. e. , Rs. 30,000/-) was allowable as deduction in the subsequent assessment year 1979-80. The appellate tribunal further observed that the conditions prescribed under Rule 4 has been satisfied by the assessee in the assessment year 1978-79. In the result, the deduction of Rs. 10,000/- in assessment year 1978-79 was allowed. The revenue has sought this reference. The relevant provision is Section 24 (l) (x) of the income tax Act, 1961 read with Rule 4 of the income tax rules. In Section 24 the deductions to be allowed while computing the income from house property are stated. One such deduction is the amount in respect of rent from property let to a tenant which the assessee cannot realise. This is subject to the rules. Rule 4 governs this provision which reads thus:"4. Unrealised rentunder clause (x) of sub-section (1) of Section 24, deduction shall be allowed of such part of income in respect of which tax is payable under the head 'income from house property" as is equal to the amount of rent payable but not paid by a tenant of the assessee and so proved to be lost and irrecoverable where - (a) the tenancy is bona fide; (b) the defaulting tenant has vacated, or steps have been taken to compel him to vacate the property; (c) the defaulting tenant is not in occupation of any other property of the assessee; (d) the assessee has taken all reasonable steps to institute legal proceedings for the recovery of the unpaid rent or satisfied the income-tax officer that legal proceedings would be useless; and (e) the annual value of the property to which the unpaid rent relates has been included in the assessed income of the previous year during which that rent was due and tax has been duly paid on such assessed income; provided that the deduction to be allowed on this account shall not exceed the income under the head income from house property included in the total income as computed without making any deduction under this rule. "in the instant case the following facts are not in dispute: (a) bona fides of the tenancy; (b) steps have been taken to have the tenant vacated; (c) the tenant is not in occupation of any other property of the assessee; (d) steps have been taken to institute legal proceedings for the recovery of the unpaid rent; and similarly clause (e) of the Rule has been satisfied. But the opening clause of Rule 4 requires the assessee to prove that the rent has been lost and irrecoverable. When a suit