TaxTMI 
TaxTMI 
2009 (1) TMI 445
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....NL. The question relates to the interpretation of rule 3(1) of the Income-tax Rules, 1962. The provisions which are relevant are contained in Table I in relation of the value of residential accommodation provided in the Table. For the year effective up to March 31, 2005, the Table read as follows: Sl. No. Circumstances Where the accommodation is unfurnished Where the accommodation is furnished (1) (2) (3) (4) (1) Where the accommodation is provided by Union or State Government to their employees either holding office or post in connection with the affairs of Union or State or serving with anybody or undertaking under the control of such Government on deputation License fee determined by Union or State Govern....
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.... is taken on lease or rent by the employer. Actual amount of lease rental paid or payable by the employer or 10% of salary whichever is lower as reduced by the rent, if any, actually paid by the employee. 2. The rule as it stands now also essentially runs on similar lines in regard to the classification. According to the petitioners, they are Central Government employees working on deemed deputation to BSNL. BSNL is a undertaking under the control of the Government. Therefore, it must be treated as they are under the first category, namely, it must be treated as a case where the accommodation is provided by the Central Government. In the writ petitions, they have also stated in ground C as follows: "C. Petitioners being the employe....
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....he employer himself and the same is chargeable to tax in the hands of the employees. Therefore, the petitioners cannot take a contention that the accommodation given to them cannot be subjected to income-tax. Income-tax is chargeable because the BSNL is giving them the accommodation." 4. I heard learned counsel for the petitioners, learned counsel appearing for BSNL besides learned counsel appearing for the Income-tax Department. Learned counsel for the petitioners would point out that in so far as the petitioners are the Central Government employees and they are on deemed deputation to BSNL, the accommodation which is provided to them must be treated as accommodation provided under clause 1. It is also pointed out that the ownership is ....
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.... 2,000 Hire charge of A/c Rs. 200 x12 = 2,400 Total value of perquisite 4,400 per annum For all others, i.e., those salaried taxpayers not in employment of the Central Government and the State Government, the valuation of perquisite in respect of accommodation would be at prescribed rates. Employees of public sector units who are not on deputation from Central or State Government would also fall in this category. The rate is 10 per cent of "salary" in cities having population exceeding four lakhs as per the 1991 census. For other places, i.e., those with population up to 4 lakhs the perquisite value 7.5 per cent. of salary. Example 2.- Mr. Sundaram is an employee in a multinational ba....