TaxTMI 
TaxTMI 
2002 (6) TMI 45
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....s employment shall be determined in accordance with the following sub-rules, namely:- (1) The value of residential accommodation provided by the employer during the previous year shall be determined on the basis provided in the Table below:... Provided that nothing contained in this sub-rule would be applicable to any accommodation located in a 'remote area' provided to an employee working at a mining site or an onshore oil exploration site, or a project execution site or an accommodation provided in an offshore site of similar nature: Provided further that where on account of his transfer from one place to another, the employee is provided with accommodation at the new place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with reference to only one such accommodation which has the lower value with reference to the Table above for a period not exceeding 90 days and thereafter the value of perquisite shall be charged for both such accommodations in accordance with the Table. (2)(A) The value of perquisite provided by way of use of motor car shall be determined on the basis provided in the Table 11 below." Ta....
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....bsp; or equipment or other similar (ii) 7.5 per cent. of salary, appliances or gadgets) or if in other cites,in respect of such furniture is hired from a the period during which the third party, by the actual hire said accomodation was charges payable for the same as &n....
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....rentia. It has also been argued and urged that there can be cases where the houses allotted to the employees by the employer may be such lower rental that 10 per cent. or even 7.5 per cent. of the salary may be considered to be very much on the higher side. The other challenge to the impugned notification is that it made the amendment applicable retrospectively. We have heard learned counsel for the parties and have given our careful considerations to the rival contentions advanced at the Bar. The impugned amendment was brought about as a consequence of the Budget Speech by the Finance Minister in Parliament. In the Budget Speech the Finance Minister very pertinently observed that the Revenue had been facing some difficulties in the past with respect to the assessment and computation of the perquisites relating to the accommodation. Section 17 of the Income-tax Act, 1961, in relation to "salary", in sub-section (2) stipulates that "perquisite" includes the value of rent-free accommodation provided to the assessee by his employer or the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer. Section 295 of t....
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.... For others, that is, employees belonging to private as well as public sector undertakings, it has been decided that the valuation of the perquisite relating to accommodation should be 10 per cent. or 7.5 per cent. of the salary as the case may be. As per the version of the respondents, this was decided in keeping with the recommendation of the expert group constituted to rationalise and simplify income-tax laws. On giving our thoughtful consideration and looking to the reasonableness of the classification between cities with population of less than four lakhs and others with bigger population, we do not find anything unreasonable in the value being fixed at 7.5 per cent. and 10 per cent., respectively, of the salary. We do not consider this unreasonable from any yardstick or parameter. According to us, the amended rule 3 does appear to be a step in the right direction especially when looking to the simplification aspect of the same. We accordingly find that the impugned notification does not suffer from any arbitrariness because in our considered opinion, for rationalising and simplifying the procedure, the Board brought about the impugned notification otherwise on account o....