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Issues Involved:
1. Computation of tax perquisite after reducing hypothetical tax. 2. Computation of accommodation perquisite. 3. Addition of telephone expenses as personal expenses. 4. Addition of food, beverages, laundry, and miscellaneous expenses as perquisite. 5. Computation of interest under section 234B. Detailed Analysis: 1. Computation of Tax Perquisite After Reducing Hypothetical Tax: The revenue contended that the CIT(A) erred in holding that the assessee is entitled to compute the value of tax perquisite after reducing the component of hypothetical tax from the tax liability borne by the employer. The assessee's employer had withheld a sum towards hypothetical tax from the salary payable. The CIT(A) deleted the addition made by the Assessing Officer, following the Tribunal's decision in Jaydev H. Raja v. Dy. CIT. The Tribunal upheld the CIT(A)'s decision, noting that similar cases had been decided in favor of the assessee, and dismissed the revenue's appeal. 2. Computation of Accommodation Perquisite: The assessee's appeal involved the computation of accommodation perquisite. The assessee stayed in a hotel for the first half of the year and in leased accommodation for the second half. The Assessing Officer computed the perquisite value for the entire year, leading to an addition. The CIT(A) upheld this computation. The Tribunal, however, found merit in the assessee's contention that the perquisite value should be computed separately for each period, as per rule 3(a)(iii)(A) of the Income-tax Rules. The Tribunal directed the Assessing Officer to recompute the perquisite value accordingly. 3. Addition of Telephone Expenses as Personal Expenses: The assessee contested the addition of 50% of telephone expenses as personal in nature. The Assessing Officer made this addition based on the assessee's admission. The CIT(A) confirmed the addition, considering it reasonable. The Tribunal upheld the revenue authorities' decision, deeming the disallowance reasonable given the assessee's status and duration of stay. 4. Addition of Food, Beverages, Laundry, and Miscellaneous Expenses as Perquisite: The assessee argued that these expenses, incurred during his stay in a hotel, should not be treated as perquisites. The Assessing Officer added these expenses to the total income, and the CIT(A) confirmed the addition. The Tribunal upheld the revenue authorities' decision, finding the valuation of perquisites reasonable. 5. Computation of Interest Under Section 234B: The assessee's ground regarding the computation of interest under section 234B was noted as consequential. The Tribunal directed the Assessing Officer to give due relief in consequence to the Tribunal's order. Conclusion: The revenue's appeal was dismissed, and the assessee's appeal was partly allowed for statistical purposes. The Tribunal directed the Assessing Officer to recompute the accommodation perquisite value and give due relief in the computation of interest under section 234B.
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