Rent concession for employee housing is not a taxable perquisite unless linked to the contract of employment.

A rent concession for residential accommodation is not a taxable perquisite unless the letting is shown to arise from the contract of employment. The tribunal found no material to establish that the accommodation was provided pursuant to service conditions, and treated the arrangement as an ordinary tenancy despite the occupants being employees. On that basis, the addition made on account of alleged perquisite was unsustainable and was deleted. The Revenue's appeals failed, and the appellate relief was upheld.

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Issues: Whether the addition made on account of alleged perquisite arising from accommodation let out to employees at a concessional rent was justified.

Analysis: No material was brought on record to show that the accommodation was let out pursuant to the contract of service. The accommodation was treated as a tenancy in the ordinary course, and the mere fact that the occupants were employees did not by itself establish a taxable perquisite.

Conclusion: The addition on account of perquisite was not sustainable and was rightly deleted.

Final Conclusion: The Revenue's appeals failed and the relief granted by the appellate authority was upheld.

Ratio Decidendi: A rent concession for residential accommodation does not constitute a taxable perquisite unless the letting is shown to arise from the contract of employment.

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