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Computation of perquisite value of free residence provided by one employer when the assessee receives remuneration from multiple employers. Analysis: The judgment addressed the question of law regarding the computation of the perquisite value of a free residence provided by one employer when the assessee earns remuneration from multiple employers. The assessee, an individual, received remuneration from two concerns, one of which provided him with a free residence. The Income-tax Officer initially computed the perquisite value at Rs. 16,200. However, the Appellate Assistant Commissioner found discrepancies in the rent paid by the employer and the utilization of the premises. He computed the perquisite value at Rs. 9,100, considering that the residence was provided by only one employer. The Tribunal upheld the assessee's contention that the value of the perquisite should be determined in accordance with rule 3 of the Income-tax Rules, 1962, based on the "salary" of the employee received from any number of employers, not just the employer providing the free residence. The key contention raised by the Department was that the term "salary due to the assessee" in rule 3(a) should be construed as the salary received only from the employer providing the free accommodation. The Department argued that common sense dictates considering the salary paid by the specific employer when valuing the perquisite of a free residence. However, the Tribunal interpreted rule 3(a) differently, emphasizing that the word "salary" should be understood as the total salary received by the employee from all employers, as per the definition provided in Explanation 1 of the rule. The Court analyzed rule 3 of the Income-tax Rules, 1962, which outlines the valuation of perquisites, specifically focusing on sub-rule (a) concerning rent-free residential accommodation. The Court highlighted that the rule defines "salary" in a manner consistent with section 17 of the Income-tax Act, encompassing the total salary chargeable to the employee, irrespective of the number of employers. The Court emphasized that the plain language of the rule supports the interpretation that "salary due to the assessee" refers to the total salary received by the employee, regardless of the source of income or the employer providing the free accommodation. In conclusion, the Court answered the question in favor of the assessee, affirming that the perquisite value of the free residence should be computed based on the total salary received by the employee from all employers, as per the provisions of rule 3 of the Income-tax Rules, 1962. The judgment emphasized the importance of interpreting tax laws in a manner that aligns with the legislative intent and ensures a fair assessment of the employee's income.
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