TaxTMI 
TaxTMI 
2008 (1) TMI 643
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....f valuation of perquisite of rent free accommodation made by the learned Assessing Officer at Rs. 14,01,878 as against Rs. 1,20,000 shown by the appellant. (b )Your appellant submits that : (i )The valuation of perquisite of rent free accommodation had been made correctly as per the rules of valuation as applicable to him, i.e., rule 3(a)(iii ) of Income-tax Rules, 1962. (ii )The valuation of the flat was based on the municipal valuation made by Brihanmumbai Mahanagar Palika. (iii)No interest was earned by the appellant on the deposits made by the company to the Owner of the premises. (iv)Alternatively, without prejudice, the valuation adopted by the learned Assessing Officer of Rs. 35,000 p.m. be taken as the value of the re....
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....the landlord on 20-4-2001 for a total consideration of Rs. 95 lakhs. He further inferred that the said amount of Rs. 95 lakhs actually represented the cost of flat when it was taken on rental basis and hence the market rent of the said flat, should be between Rs. 50,000 to Rs. 75,000 per month. Since the employer had given interest free deposits of Rs. 30 lakhs to the landlord, the Assessing Officer was of the view that interest at the prevailing rate of 12 per cent on the said deposit is required to be taken into consideration for estimating the fair rental value of the said flat. The Assessing Officer, therefore, worked out the monthly rent of the said flat to be Rs. 35,000 as, against Rs. 10,000 per month shown by the employee. Taken int....
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....'s salary, the value of perquisites, shall be taken to be 10 per cent of the salary increased by sum equal to the amounts by which the fair rental value exceeds 20 per cent of this salary. But, in any case, the value of perquisites, cannot be the same as adopted by the Assessing Officer. 6. The learned counsel for the assessee further invited our attention to the Circular No. 130 reported at 94 ITR Statute 17 and its explanatory note through which it has been clarified that the employees, who do not fall in the first two categories would fall in the third or residuary category, mainly comprising of employees in the private sector. In the case of these persons, the perquisite value of rent free unfurnished accommodation will ordinarily be....
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....er the amended rules, the value of perquisites for the residential accommodation provided by the employer, shall be the actual amount of lease rent paid or payable by the employer or 10 per cent of the salary whichever is lower, as reduced by rent if any paid by the employee. As per the amended Rules, there is no concept of determination of the fair rental value for the purpose of ascertaining the value of perquisites for rent free residential accommodation provided to the employees. As per old Rules, the perquisite value of the rent free residential unfurnished accommodation shall ordinarily be a sum equal to 10 per cent of the salary due to the assessee in respect of the period during which the said accommodation was occupied by him durin....