TMI Blog2007 (7) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, he came to the conclusion that wherever the value of benefit exceeded Rs. 1,000 per month per child, the whole of the value of the benefit to the employees resulting from free educational facilities had to be taken as the value of the perquisite without allowing any deduction therefrom. However, it is also mentioned that while calculating the perquisite value, the assessee wrongly allowed a deduction of Rs. 1,000 per month per child leading to lesser deduction of tax at source from the salary than what ought to have been made. Coming to the facts in the case of Rohini branch, he furnished a table consisting of short deduction of tax for financial years 2001-02 to 2004-05 and computed tax thereon @ 20 per cent at Rs. 1,77,600. He added surcharge and education cess amounting to Rs. 4,824 and Rs. 2,361 respectively. Thus, the short deduction of tax in this branch was worked out at Rs. 1,84,785. Interest under s. 201(1A) on this amount was computed at Rs. 29,186. Thus, the assessee was required to pay a total sum of Rs. 2,13,971 (Rs. 2,14,166 as per the AO). Similar calculations were done in respect of other branches at Pitampura and Ganga Ram Hospital Marg. 3. Aggrieved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iketan in ITA Nos. 2272 to 2281/Del/2006 for financial years 2000-01 to 2004-05 dt. 23rd March, 2007, a copy of which was filed before us. The finding of the Tribunal in that case was that proviso to r. 3(5) will apply where,-(i) determination of value of benefit in the form of free or concessional educational facilities is required in a situation where educational institution is maintained and owned by the employer and in such a case the value has to be measured in terms of cost of providing education in a similar institution in or near the locality; and (ii) determination of value of benefit is required where free educational facilities are provided in an educational institution by reason of employment with a particular employer and in such a case also the value has to be measured in terms of cost of providing education in a similar institution in or near the locality. There could also be a third case where free or concessional educational facilities are provided in a school not owned or maintained by the employer by reason of employment with the employer. In the first and third case, any recovery made by the employer from the employee has to be deducted in arriving at the value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amplitude of the exemption or relief given by the Parliament by laying stress on any ambiguity here or there. Further, he relied on the decision of Hon'ble Bombay High Court (Nagpur Bench) in the case of CIT vs. Smt. Archana R. Dhanwatey (1981) 24 CTR (Bom) 142 : (1982) 136 ITR 355 (Bom), in which it was inter alia pointed out that even where the assessee has not claimed any deduction although he was entitled to such a deduction, such deduction could be allowed from income from other sources and the Tribunal was right in holding that if the claim for deduction made before the ITO could not be considered by way of deduction from income from house property but could be considered against income from other sources, nothing prevented the ITO for allowing such a claim under the residuary head. He also relied on the decision of Hon'ble Madhya Pradesh High Court in the case of CIT vs. Ganga Engineering Works (1986) 52 CTR (MP) 277 : (1987) 165 ITR 795 (MP), in which it was pointed out that where necessary data was available on record with the ITO but deduction was not claimed and allowed, the Tribunal can allow such deduction if the material on record justifies the allowance of the dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arising on account of bona fide interpretation of exemptions, deductions etc. should not be held against the assessee so as to treat him as an assessee in default, as held in the case of Gwalior Rayon Silk Co. Ltd. vs. CIT (1983) 37 CTR (MP) 351 : (1983) 140 ITR 832 (MP). It was held that under r. 3(5), the value of benefit to employee from free or concessional educational facility is to be computed on the basis of cost to the employer. As the cost was worked out at Rs. 902.27 by the learned CIT(A), nothing could be considered as perquisite in the hands of the employee. It was also held that benefit of Rs. 1,000 per month per child has to be given as per intention of the legislature. Thus, the appeal of the Revenue was dismissed. 5.3 In the rejoinder, the learned Departmental Representative pointed out that the cases of teachers and employees were not under consideration to whom deduction under s. 88 was to be granted in accordance with the aforesaid third proviso. The assessee is a trust and in such a case only TDS provisions were to be considered. 5.4 We have considered the facts of the case and rival submissions. We are of the view that for determination of these two appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ren of the employees and, therefore, proviso to r. 3(5) was not at all attracted. In this case, the employer is admittedly providing free educational facilities to the children of the employees. In such a situation, as held in the case of Delhi Public School, there will be no perquisite value if the cost did not exceed Rs. 1,000 per month per child. There seems to be some dispute regarding the cost per child for financial years 2001-02 and 2002-03 in respect of children studying in Classes VI to VII and IX to XII and VI to XII respectively. This is a matter of verification, which can only be done at the end of the ITO. Therefore, we restore this matter to the file of the AO with a direction to workout the cost to the employer in respect of aforesaid classes and workout perquisite value after deducting Rs. 1,000 per month per child. Thus, these two appeals are treated as partly allowed for statistical purposes. ITA Nos. 2288 2289/Del/2006: Rohini branch-Financial years 2003-04 2004-05 7. The argument in respect of these appeals was the same as in Appeal Nos. 2284 and 2285/Del/2006, namely, that the provision contained in third proviso below sub-s. (5) of s. 88 is applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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