TMI Blog1990 (1) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... e balance addition made by the ITO. On the facts and in the circumstances of the case, the learned Commissioner (Appeals) while giving the direction failed to appreciated provisions of section 17 (2) (iii) ( a) of the Act and the fact that the recovery at the rate of ₹ 2,000 per month towards food, refreshment, laundry, etc., was prima facie inadequate. The issue involved in the present case is regarding the valuation of rent-free accommodation provided to the assessee by his employer. The assessee, an individual is a foreign national, who arrived in India on 7th September 1981. As per the terms of employment, he was to be provided with a residential accommodation by his employer. Since, on his arrival in India a suitable accomm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emently contended before us that the value taken by the ITO on the basis of the hotel bill of the accommodation provided to the assessee represented the correct market value. He submitted that when the actual figure of the rent paid by the employer was available, no other method was required to evaluate the perquisite value of the accommodation provided to the assessee. He submitted that the ITO's order on this point should be upheld by us. On the other hand, Shri. S.P. Mehta, the learned counsel for the assessee, strongly argued that when the assessee was asked to stay in a hotel, because of the inability of the employer to provided an accommodation, the actual bill paid to the hotel, would not represent the correct perquisite value to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances, it is not correct to say that the entire hotel bill for the room provided in the hotel should form the basis while determining the value of the perquisite on account of rent-free accommodation in the hands of the assessee. In 49 ITR page 395 (supra) a company gifted to its employees a suit, overcoat or raincoat, for which it paid 14.15s to the tailor. This suit which cost 15 was gifted to the employee. In the case of the employee when an assessment was made upon him this sum of 15 was included in his taxable income. On appeal, it was held that the employee never acquired any rights either against his employers or against the tailor supplying the suit and that only the value of the suit was includible in his hands which was 5 on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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