Residential accommodation perquisite valuation excludes separate tax on employer-funded repair and renovation absent employee obligation.

Employer-funded repair and renovation of an employee's leased residential accommodation was held not to be a separate taxable perquisite where the premises were leased in the employee's own name and no enforceable obligation to carry out the renovations was shown. The prescribed valuation mechanism under Rule 3 for residential accommodation perquisites was treated as exhaustive, so the tax authorities could not add renovation expenditure outside that scheme. The principle of expressio unius est exclusio alterius supported exclusion of any independent perquisite addition. Section 17(2)(iv) was therefore inapplicable on these facts, and the expenditure was excluded from taxable income.

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Issues: Whether the expenditure incurred by the employer on repair and renovation of the employee's leased residential accommodation was taxable as a perquisite under Section 17(2)(iv) of the Income-tax Act, 1961, or had to be valued only under Rule 3 of the Income-tax Rules, 1962.

Analysis: The accommodation was not provided rent-free by the employer; the assessee had taken the premises on lease in his own name. The lease deed did not impose any obligation on the assessee to carry out renovations, and the material did not show that the expenditure represented discharge of any enforceable obligation of the assessee. Rule 3 gave a specific statutory method for valuing the perquisite of residential accommodation, including furnished accommodation and fair rental value, and that express scheme excluded any separate addition of renovation or repair expenditure as a perquisite. The principle of expressio unius est exclusio alterius supported the view that where Parliament has prescribed the mode of valuation, the authorities cannot travel beyond it and treat renovation expenses as an independent perquisite. Section 17(2)(iv) was therefore inapplicable on the facts.

Conclusion: The renovation and repair incurred by the employer was not taxable as a perquisite in the assessee's hands and had to be excluded from his taxable income.

Final Conclusion: The assessment could not include the employer's repair and renovation expenditure as an additional perquisite over and above the prescribed valuation of residential accommodation, and the assessee succeeded in full.

Ratio Decidendi: Where a statute prescribes an exhaustive method for valuing a residential accommodation perquisite, expenditure on repairs or renovation cannot be separately taxed as a perquisite unless the employee had a specific legal obligation that was actually discharged by the employer.

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