1990 (3) TMI 365 - HC - Income Tax

Summary

Issues:
Interpretation of exemption under s. 10(14) of the IT Act for the value of rent-free accommodation provided to the assessee by the employer.

Analysis:
The case involved a question of law regarding the exemption of the value of rent-free accommodation provided to the assessee by his employer under s. 10(14) of the IT Act for the assessment year 1980-81. The assessee, a commissioning engineer, was a permanent employee of a company based in the UK and came to India for a specific assignment related to the installation of a gas turbine. The employer provided rent-free accommodation to the assessee during his stay in India. The Income Tax Officer (ITO) disallowed the claim for exemption under s. 10(14) on the grounds that the assessee was on a regular posting in India and the accommodation provided was a perquisite. The Commissioner of Income Tax (Appeals) (CIT(A)) reversed the decision of the ITO, holding that the rent-free accommodation was exempt under s. 10(14) considering the specific circumstances of the case and a similar precedent. The Revenue appealed to the Tribunal challenging the CIT(A)'s decision.

The Tribunal, after considering the submissions and the facts of the case, held that the assessee was in India on tour for the performance of his duties related to the specific assignment. The Tribunal also noted that the rent-free accommodation did not result in a personal advantage to the assessee. In support of its decision, the Tribunal referred to a decision of the Madras High Court in a similar case. The Tribunal upheld the CIT(A)'s decision and ruled that the rent-free accommodation provided to the assessee was exempt under s. 10(14) of the IT Act. The High Court agreed with the Tribunal's reasoning and the decision of the Madras High Court, thereby answering the question referred to them in the affirmative and in favor of the assessee.

In conclusion, the High Court upheld the exemption of the value of rent-free accommodation provided to the assessee by his employer under s. 10(14) of the IT Act, considering the specific circumstances of the case and the purpose of the assessee's visit to India for a particular assignment.