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2009 (1) TMI 445

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..... what was applicable to employers of all employees other than Central Government and State Governments. - 3894 and 11807 of 2008 (E). - - - Dated:- 21-1-2009 - K. M.JOSEPH J. K. P. Pradeep (Payyannur) for the petitioners. Mathew K. Philip, P. K R. Menon, Jose Joseph, P. K Ravindranatha Menon, George K George and V. R. Kesava Kamal for the respondents. JUDGMENT K. M. JOSEPH J. - In these writ petitions, what is under challenge is a clarification issued by the Central Board of Direct Taxes. The claim of the petitioners is that they are Central Government employees working on deemed deputation to BSNL. The question relates to the interpretation of rule 3(1) of the Income-tax Rules, 1962. The provisions which are rel .....

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..... annum of the cost of furniture (including television sets, radio sets, refrigerators, other household appliances, air conditioning plant or equipment or other similar appliances or gadgets) or if such furniture is hired from a third party, by the actual hire charges payable for the same as reduced by any charges paid or payable for the same by the employee during the previous year." (a) where the accommodation is owned by the employer; or (ii) 7.5% of salary in other cities, in respect of the period during which the said accommodation was occupied by the employee during the previous year as reduced by the rent, if any, actually paid by the employee. (b) where the accommodation is taken on lease or rent by the employer. .....

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..... /2000 Restg., dated September 30, 2000. But the conveyance of deeds to BSNL are only under progress and yet to be completed. But BSNL is the custodian of all the assets of erstwhile DoT including the quarters and BSNL is allotting these quarters to all its staff irrespective of the fact whether they are BSNL absorbed staff or staff on deemed deputation. 6. As consequence of change of category of the employees after the BSNL became a company, the amendment made in relation to section 17(2) (ii) of the Income-tax Act in the Finance Act of 2007, has operated retrospectively. The concession in the matter of rent of accommodation provided by the employer to the employees is deemed to have been provided by the employer himself and the same is c .....

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..... Government employee on deputation with a public sector undertaking. She is provided with rent-free furnished accommodation. Her salary as per rule 3 - Rs.10,000 per month, licence fee for accommodation is Rs.300 per month, licence fee paid by her is Rs.300 per month. Furniture provided costs Rs.20,000. She is also provided with an air-conditioner hired at the rate of Rs. 200 per month. What would be the value of perquisites of furnished accommodation: (Rs.) (Rs.) Licence fee as per Govt. rules Rs. 300 x 12 = 3,600 Less: Rent paid Rs. 300 x 12 = 3,600 Value of perquisite Nil Nil Add 10% cost of furniture of Rs. 20,000 Rs. 2,000 .....

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..... than the Central Government and the State Government." Having heard both parties, I am of the view that there is no merit in the contention of the petitioners. The petitioners are Central Government employees on deputation to BSNL. BSNL may be a public sector company coming under the Government of India. It is also pointed out that it is owned by the Government of India. But, the issue that arises is the interpretation of the rule as pointed out by the learned counsel for the respondents and the question to be posed and answered is who provides the accommodation. Going by the pleadings, it would appear to be clear that the accommodation, as far as the petitioners are concerned, is provided not by the Central Government but by BSNL. In fa .....

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