TMI Blog2010 (2) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... ef are that the assessee for the relevant year had received salary of Rs. 55,70,706 from Star India and salary of Rs. 49,51,436 from Satellite Television Asia Region Ltd. The Assessing Officer noted from the salary certificate given by the Star India that a sum of Rs. 20,000 per month had been deducted from the salary on account of housing accommodation provided by the company being the Flat No. 15, Marlowe Building, 62B, Pochkanwala Road, Worli, Mumbai - 400 018. The said accommodation had been taken by the company on lease from Mr. Satyen Purhit and Mandira Purhit vide agreement dated 25-4-2001. The employer-company had given interest-free security deposits of Rs. 1.20 crore to the landlord and was paying monthly rent of Rs. 5,000 for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder rule 3( a )( iii ). Since the total salary received by the assessee was Rs. 10,51,960 the perquisite value was determined at Rs. 9,90,960 (Rs.10,51,960 - 60,000) which was added to the total income. 3. In appeal the assessee reiterated the submissions before CIT(A) that the perquisite value of the accommodation could be based only on the standard rent fixed under the Bombay Rent Control Act. It was also submitted that the Assessing Officer was not justified in considering the notional interest on the security deposits of Rs. 1.20 crore for arriving at the fair rental value. Alternatively it was also argued that interest rate of 12 per cent taken by the Assessing Officer was very unreasonable keeping in view the current rate of fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d-up capital of Rs. 1 crore or more as per section 3(1)( b ) of the said Act. In the present case, the accommodation had been taken on lease by a multinational company having paid-up capital of rupees several crores and, therefore, provisions of the Rent Control Act were not applicable in case of the assessee and, accordingly, the judgment of Hon ble High Court of Mumbai in case of M.A.E. Paes ( supra ) was inapplicable. As regards the consideration of notional interest on the deposits while determining the fair rental value of the accommodation CIT(A) was referred to the judgment of Hon ble High Court of Mumbai in case of CIT v. Ashraf-Ur-Rehman Azimullah [1994] 209 ITR 341. In that case, the assessee was paying rent to the employer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken into account while computing the perquisite value. He also raised objections in relation to the notional interest of 10 per cent adopted by the Assessing Officer while computing the fair market value. The Learned DR, on the other hand, supported the orders of authorities below and placed reliance on the findings given in the respective orders. 5. We have perused the records and considered the rival contentions carefully. The dispute is regarding determination of perquisite value on account of accommodation provided by the employer-company. The employer-company had taken the said accommodation on lease at monthly rent of Rs. 5,000 after paying interest-free deposit of Rs. 1.20 crores to the landlord. The accommodation had been provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... site value in the hand of the assessee was computed at Rs. 9,90,960 which was added to the total income. 6. The learned AR for the assessee reiterated the submissions made before the lower authorities that the perquisite value of the accommodation has to be computed only on the basis of standard rent. Reliance has been placed on the judgment of Hon ble High Court of Mumbai in case of M.A.E. Paes ( supra ). We have perused the said judgments in which the Hon ble High Court following the judgment of Hon ble Supreme Court in case of Mrs. Shiela Kaushish v. CIT [1981] 131 ITR 435 and other judgments had taken the view that fair rental value of the accommodation cannot exceed the standard rent under the Rent Control Act applicable to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest has, therefore, to be taken into account in computing the fair rent while computing the perquisite value. This view is also supported by the judgment of Hon ble High Court of Mumbai in case of Ashraf-Ur-Rehman Azimullah ( supra ). The assessee has also disputed the rate of interest applied by the Assessing Officer at 12 per cent. However, we agree, with the CIT(A) that even if the rate of interest is taken at low, say, about 8 per cent, the perquisite value of the accommodation would be almost same. It has also been argued that while computing the perquisite value the salary from only one employer should be considered. We are, however, unable to accept the argument. The computation of perquisite value as per the rule is based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
