Employer accommodation valuation must reflect open market rent, not standard rent, and may include notional interest on security deposit.

Employer-provided accommodation outside the Rent Control Act was required to be valued at open market fair rental value, not confined to standard rent, because the premises fell within a statutory exemption. In computing that value, the employer's interest-free security deposit to the landlord was a relevant accommodation cost, so notional interest on the deposit was includible. The salary-based computation also required aggregation of annual salary from more than one employer. On these principles, the perquisite value was upheld as correctly computed.

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Issues: Whether the perquisite value of employer-provided accommodation had to be restricted to standard rent under the Rent Control Act, whether notional interest on the employer's interest-free security deposit was to be included in fair rental value, and whether salary from both employers had to be taken into account for computation under the rules.

Analysis: The accommodation was not covered by the Rent Control Act because it was leased by a multinational company falling within the statutory exemption. In such a case, the fair rental value could not be confined to standard rent and had to be determined on the basis of the open market value. The employer's interest-free deposit to the landlord was a relevant part of the accommodation cost and notional interest thereon was therefore includible while estimating fair rent. The computation under the rule is based on annual salary, and where the assessee received salary from more than one employer, the entire annual salary had to be considered.

Conclusion: The perquisite value was correctly computed by the Revenue authorities, and the assessee's challenge failed.

Ratio Decidendi: Where accommodation is outside the rent control regime, its perquisite value under the salary rules is not capped by standard rent and may include the effect of the employer's interest-free deposit and the assessee's aggregate annual salary.

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