Standard rent governs valuation of rent-free residential accommodation perquisite where company property is used by a director.

For assessment year 1971-72, the value of rent-free residential accommodation provided by an employer was held to be limited to the standard rent fixed under the applicable rent control law. The court followed binding precedent that, where a company's property is used by a director, the absence of a formal letting does not prevent valuation of the accommodation perquisite on the basis of standard rent. That principle was applied to determine the taxable value of the benefit, and the Tribunal's view limiting the valuation was upheld in favour of the assessee.

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Issues: Whether, for assessment year 1971-72, the value of the perquisite arising from rent-free residential accommodation provided by the employer could be limited to the standard rent fixed under the rent control law.

Analysis: The question was treated as covered by binding precedent holding that where a company's property is used by a director, the absence of a formal letting does not prevent valuation of the accommodation on the basis of standard rent under the applicable rent control regime. The court followed that view and applied the principle that standard rent is the proper measure for determining the value of such a rent-free accommodation perquisite.

Conclusion: The perquisite was to be valued on the basis of standard rent, and the Tribunal's view limiting the valuation was upheld in favour of the assessee.

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