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Issues:
Computation of perquisite value on account of accommodation provided by the employer and charge of interest under sections 234B and 234C. Analysis: 1. The dispute centered around the determination of the perquisite value related to accommodation provided by the employer. The employer had leased accommodation at a monthly rent of Rs. 5,000 after providing an interest-free deposit of Rs. 1.20 crores to the landlord. The employee was charged Rs. 5,000 per month for the accommodation and an additional Rs. 15,000 for furniture. The employee argued that the perquisite value should be based on the standard rent, citing a valuation report showing the standard rent at Rs. 5,455 per annum. 2. The Assessing Officer disagreed with the employee's computation, considering notional interest on the interest-free deposits in determining the fair rental value. The AO calculated the notional interest at 12%, resulting in a perquisite value of Rs. 9,90,960. The employee contended that the fair market value should be based only on the standard rent, referencing a High Court judgment. However, the Maharashtra Rent Control Act exempted certain entities, including multinational companies, from standard rent restrictions, allowing for consideration of notional interest in fair rental value determination. 3. The employee further challenged the interest rate used by the AO and argued that only the local salary should be considered for perquisite value computation. The Tribunal upheld the lower authorities' decision, emphasizing that the Rent Control Act did not apply in this case due to the multinational company's involvement. The Tribunal affirmed the inclusion of notional interest in fair rental value calculation, rejecting the employee's arguments regarding interest rate and salary source considerations. 4. Ultimately, the Tribunal dismissed the employee's appeal, confirming the computation of the perquisite value by the lower authorities. The Tribunal highlighted that the calculation should be based on the annual salary received, regardless of the number of employers. The Tribunal upheld the consideration of notional interest in determining the fair rental value and rejected the employee's contentions regarding interest rate and salary source exclusions. In conclusion, the Tribunal upheld the lower authorities' decision regarding the computation of the perquisite value related to accommodation provided by the employer, emphasizing the inclusion of notional interest in determining the fair rental value and rejecting the employee's arguments concerning interest rate and salary source considerations.
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