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TMI Blog2003 (4) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... provided to the employees is not perquisites within the meaning of section 40A(5) of the Income-tax Act? In the case of Citibank N.A. v. CIT--decided on March 5, 2003, vide Income-tax Reference No. 5 of 1994, this court took the view that the expenditure incurred by the assessee-company on repairs and maintenance of flats owned by the assessee-company and used for the residence of employees is a perquisite within the meaning of section 40A(5) of the Income-tax Act. Therefore, to that extent, we answer question No. 1 in the negative, i.e., in favour of the Department and against the assessee. However, it is argued on behalf of the assessee that in this case, the assessee has incurred expenditure by way of premium paid by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. That, by payment of premium for insuring the building, there is no such value addition. That, such payment is only to provide a cover against the risk of fire, theft, accident, etc., and, therefore, such payment does not relate to the assets of the assessee and, therefore, it is not covered by section 40A(5)(a)(ii). We do not find any merit in this argument. As held by us in our judgment in the case of Citibank N.A. v. CIT, section 40A(5)(a)(ii) states that where the assessee incurs any expenditure in respect of any asset of the assessee used by the employee, the ceiling prescribed under section 40A(5) stands attracted, the object being to disallow the expenditure by an employer beyond the prescribed ceiling. Section. 40A( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and against the assessee. "(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the perquisites value of the car should be computed as per rule 3(c) of the Income-tax Rules?" In view of the judgment of the Supreme Court in the case of CIT v. British Bank of Middle East [2001] 251 ITR 217, this question is answered in the negative, i.e., in favour of the Department and against the assessee. "(3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the house rent allowance paid to the employees should not be considered as salary for the purpose of disallowance under section 40A(5) of the Income-tax Act?" In view of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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