Standard deduction and rent-free accommodation valuation turn on separate salary receipts and standard rent principles.

Salary includes perquisites under the Income-tax Act, so standard deduction may be considered separately for each salary received from different employers, including the salary element represented by rent-free accommodation. For valuation of rent-free furnished accommodation, the article states that standard rent is the proper basis where rent control principles apply, and actual rent from other let-out portions should not govern the perquisite value. On both issues, the assessee's position was accepted and the revenue's valuation and additions were not sustained.

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Issues: (i) Whether standard deduction was allowable separately in respect of salary received from different employers and on salary inclusive of perquisites; (ii) whether the value of rent-free furnished accommodation had to be determined with reference to standard rent and not by adopting actual rent received from other portions of the property.

Issue (i): Whether standard deduction was allowable separately in respect of salary received from different employers and on salary inclusive of perquisites.

Analysis: Salary includes perquisites under section 17 of the Income-tax Act, 1961. Where an assessee receives salary from more than one employer, the claim for standard deduction is to be considered for each salary separately. Rent-free accommodation provided by an employer forms part of the salary package for this purpose, and the assessee is entitled to deduction in respect of that component as well.

Conclusion: The issue was decided in favour of the assessee, and standard deduction was directed to be allowed separately for each salary and in relation to the salary element represented by the accommodation perquisite.

Issue (ii): Whether the value of rent-free furnished accommodation had to be determined with reference to standard rent and not by adopting actual rent received from other portions of the property.

Analysis: For valuation of the residential accommodation perquisite, the governing principle is that the annual letting value must be linked to the standard rent where rent control legislation applies. The valuation cannot properly rest on actual rent fetched from other let-out portions of the building when that does not reflect the standard rent basis required by law. On that footing, the municipal valuation was the proper guide for determining the perquisite value.

Conclusion: The issue was decided in favour of the assessee, and the valuation adopted by the revenue authorities was set aside.

Final Conclusion: The assessee succeeded on all substantive issues, and the additions and valuation made by the revenue authorities were not sustained.

Ratio Decidendi: Salary includes perquisites, standard deduction is allowable separately for distinct salary receipts from different employers, and the value of rent-free accommodation perquisite must be determined on a standard rent basis where rent control principles apply.

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