1977 (10) TMI 83

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....use occupied by the assessee. The assessee pointed out that even though the reimbursement was to the tune of Rs. 9,000 the amount being in respect of the perquisite it should be valued in accordance with the rules prescribed and in accordance with the provisions of s. 17(2)(iii) of the IT Act, 1961. The ITO rejected the assessee's claim and held that the amount of Rs. 9,000 was profit in lieu of salary and fell for consideration in terms of s. 17(3)(ii) of the Act. On the basis of the above interpretation, the ITO brought the whole of the amount of Rs. 9,000 to tax against Rs. 2,160 representing the value of the perquisite as was offered by the assessee. In appeal by the assessee to the AAC, the attention of the AAC was invited to the Circu....

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....uld have effect. For this purpose, it is necessary to quote the Board circulars in full: "61/.S 16(iv) Taxation of perquisite value of the household servants provided by employers to their employees. I am directed to refer to your communication, dt. 31st Jan., 1969, to the Board on the above subject requesting re-examination of the matter, on the plea that since the gardeners, night-watchman and sweepers etc. are provided by the employer primarily for the proper up keep and maintenance of the property in the occupation of the employer and partly for the benefit of the employees, only a portion of the salaries of those categories of servant, which will represent the benefit accruing to the employees should be treated as perquisite in thei....

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.... two does not make any distinction between a property which is partly in the occupation of an employee and fully in his occupation. So far as the services of servants are provided by the employer, the value of the perquisite on account of such services is to be calculated in the prescribed manner. In our opinion, the instructions in the above quoted circular are very clear and they take into their sweep all cases where the employer has agreed to provided services of the servants to the employee. In such cases, the value of the perquisite in the form of the services rendered by sweeper, gardener, watchmen, is to be taken at Rs. 60 per month in each case. The assessee claimed that these instructions of the Board should be taken into accoun....