9911796707
TMI Blog2005 (12) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... (Del)/95, respectively. All these appeals are relating to the assessment years 1991-92 and 1992-93. By the said impugned order the learned Income-tax Appellate Tribunal had confirmed the findings of the Commissioner of Income-tax (Appeals), Dehradun (in short "the CIT (Appeals)"), by which the appeals were decided in favour of the assessee. The brief facts are that, the assessing authority on scrutiny of the annual return of salaries filed by the assessee before the Assessing Officer noticed that many of the employees were not paid house rent allowance whereas some were paid. On the inquiries being made it was revealed that the assessee had failed to add the perquisite value of rent free accommodation and the value of other amenities which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est under section 201(1A) and the short deduction of tax was computed at Rs. 95,430 and Rs. 95,325 respectively for both the years. Feeling aggrieved by the said order, the assessee preferred appeals before the Commissioner of Income-tax (Appeals) and the Commissioner of Income-tax (Appeals) while allowing the appeals observed that no perquisite value can be added in the hands of the assessee. It was further held that the said concession cannot be termed as a perquisite acceptable under the Income-tax Act. Feeling aggrieved by the said order, the appellant/Department preferred an appeal before the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal also agreeing with the finding recorded by the Commissioner of Income-tax (Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act and is liable to be charged under the Income-tax Act. Section 17(2) of the Act defines "perquisites" as under: "17. For the purposes of sections 15 and 16 and of this section,- (2) 'perquisite' includes- (i) the value of rent-free accommodation provided to the assessee by his employer; (ii) the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer; (iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases:- (a) by a company to an employee who is a director thereof; (b) by a company to an employee being a person who has a substantial interest in the company; (c) by any employer (including a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee must be held to be enjoying the perquisite because the employees are paying the rent less than the leased amount and it is a concession in terms of rule 3. Rule 3 has been framed in exercise of the power conferred by section 295(2)(c) of the Act. The aim and object of the said rule is to compute the value of the perquisite chargeable to tax. The assessing authority has first to come to the conclusion that the concessional accommodation was a perquisite as defined under section 17(2) which is a substantive law. The procedure as to how the perquisite will be computed for the computation of the income tax is provided under rule 3. As such this rule relates to the procedure for computation of the tax. Learned counsel for the assessee/r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modation of the category which should have been allotted to the officer), the difference cannot be treated as perquisite. Similarly, if the rent of an accommodation is fixed irrespective of the person who occupies it, the difference between 10 per cent, of salary and the fixed rent paid cannot be said to be any perquisite. In these cases it cannot be said that the officer was granted any concession in the matter of rent." Following the above decision, the Calcutta High Court has held as under (headnote of [1994] 209 ITR 72): "That the question of concession must be determined with reference to the nature of the accommodation provided, the normal rent payable in respect of such accommodation by other employees similarly situated and the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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