1983 (8) TMI 127 - AT - Income Tax

Summary

Issues:
- Standard deduction on salary income from multiple employers
- Standard deduction on value of furnished accommodation as perquisite
- Valuation of perquisites for furnished accommodation

Standard Deduction on Salary Income from Multiple Employers:
The ITAT Indore heard appeals related to the assessment year 1979-80 where the assessee's appealed against the AAC's orders. The issue revolved around the standard deduction not being granted for separate salary incomes from different employers. The ITAT referred to a Bombay Tribunal decision stating that standard deduction should be allowed individually for each salary received from multiple employers, potentially exceeding the standard limit of Rs. 3,500. Consequently, the ITAT directed the ITO to grant standard deductions for each salary received.

Standard Deduction on Value of Furnished Accommodation as Perquisite:
Regarding the furnished accommodation provided by Kalani Bros. Pvt. Ltd., the ITO rejected the standard deduction claim, arguing that the value of the accommodation cannot be equated to salary. However, the assessee contended that under Section 17 of the IT Act, salary includes perquisites, such as rent-free accommodation. The ITAT agreed with the assessee, stating that employees provided with rent-free accommodation in lieu of salary are entitled to claim a deduction for the value of the accommodation.

Valuation of Perquisites for Furnished Accommodation:
The final issue involved the valuation of perquisites for furnished accommodation. The ITO valued the accommodation at Rs. 12,000, which was contested by the assessee. The AAC upheld the ITO's valuation based on actual rent received for a portion of the building. However, the assessee argued that the valuation should be based on the Annual Letting Value as per Supreme Court decisions. The ITAT concurred, stating that the value should align with the Annual Letting Value determined under the Rent Control Act, leading to a lower valuation than initially assessed. Consequently, the ITAT allowed the appeals filed by the assessee on this matter, resulting in a favorable outcome for the assessee's in the case.