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TMI Blog2001 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... the value of perquisite on account of residential house known as 'Modi Bhawan' was not assessable under section 28 read with section 2(24)(iv) of the Income-tax Act, 1961, but under section 17(2) of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the method of assessing its value was correct in law and whether the Tribunal was justified in reducing it from the value assessed by the Appellate Commissioner?" Before adverting to the aforesaid questions, it would be appropriate to state the background facts under which these questions have arisen in all these cases. The various assessees in these cases are family members who were provided accommodation in the residential house known as "Modi Bhawan". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t this stage that another question regarding value of this perquisite also arose. It was as to whether in respect of this rent-free accommodation provided to the assessees, the value is to be based on standard rent fixed by the Rent Controller's orders in similar cases or the prevailing market rate of rent. This question was answered by this court in the case of CIT v. M.K. Modi [1993] 200 ITR 673, holding that when the property belonging to the company is allowed to be used by the director then even though it may not be a case of letting out, the value of the rent-free accommodation has to be determined as per the decision of the Supreme Court in the case of Dewan Daulat Rai Kapoor v. New Delhi Municipal Committee [1980] 122 ITR 700, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Income-tax Appellate Tribunal. Since the order of the Income-tax Appellate Tribunal which became the basis of the orders of the Tribunal in all other cases is upheld, the other references can also be answered in the same manner, i.e., in favour of the assessees and against the Revenue. However, there would be additional reasons for doing so. It may be mentioned at this stage that the order dated December 12, 1974, of the Income-tax Appellate Tribunal is annexed as annexure in the paper book of I.T.R. No. 287 of 1981. A perusal of that order would show that the Tribunal recorded the finding of fact and proceeded on that basis that the Income-tax Officer was not justified in treating the income on account of the perquisit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r applicability of section 2(24)(iv) on the basis that it was a case of perquisite by a director and not an employee. This premise itself is unfounded in lieu of finding of fact recorded by the Income tax Appellate Tribunal and as noticed above. Moreover, nothing would turn on the decision as to which of the aforesaid two provisions are applicable inasmuch as even if this is treated as income in the hands of these assessees under section 2(24) as a perquisite given to the director, ultimately the value of this perquisite has to be determined. For determination of the value, one has to fall back on the formula contained in CIT v. M.K. Modi [1993] 200 ITR 673 (Delhi) as per which it is the standard rent which has to be on the basis of standar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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