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2011 (7) TMI 569 - HC - Income TaxDisallowance of Provision under Rule 3 (5) of Income-tax Rules, 1962 - Deduction of tax at source - Assessee submitted that in terms of proviso to rule 3(5) of the 1962 Rules, the value of the perquisite relating to free educational facility provided to the wards of the employees/staff of the school had to be on the basis of value of such facility in a comparable case and if it exceeded Rs. 1000 per month per child, then the amount of Rs. 1000 per month per child had to be reduced from the perquisite value and tax deducted at source on the remaining amount, if any - The cost of education for determining the value of free/concessional educational facility was also challenged - Held that:- The AO while adjudicating the issue against the assessee had specifically held that the tuition fee in the case of the students of the assessee school was more than Rs. 1000 per month as the assessee had deducted tax at source from the salary of the employees including valuation of perquisite after reducing Rs. 12000 per annum per child. Once the value of the perquisite exceeded Rs. 1000 per mensem, Rule 3(5) of 1962 Rules applied and proviso thereto had no applicability - The Tribunal had remanded the matter to the AO for recomputation of cost/value of perquisite to an employee by providing an opportunity to the assessee to point out any difference in the valuation as made by the Assessing Officer and the CIT(A) - No error or perversity could be pointed out in the approach of the Tribunal - The appeals filed by the revenue and the assessee stand disposed of.
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