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TMI Blog2011 (9) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... n 10% of the salary of the Assessee and therefore, the decision of the ITAT in holding that the actual amount of lease rent paid by the employer should be taken into consideration while computing the perquisite value of the residential accommodation cannot be faulted - Appeal is dismissed - Income Tax Appeal No. 3516 of 2010 - - - Dated:- 6-9-2011 - J.P. Devadhar, K.K. Tated, JJ. Suresh Kumar for the Appellant JUDGEMENT 1. Where an employer takes residential premises on rent by giving security deposit for the benefit of employees, whether the notional interest on such security deposit is liable to be included in the perquisite value of the accommodation given to the assessee employee is the question raised in this appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is lower, as reduced by the rent, if any, actually paid by the employee. The Tribunal held that under the amended rules, there is no concept of determination of the fair rental value for the purpose of ascertaining the perquisite value of the rent free residential accommodation provided to the employees. 6. In the present case, the yearly rent paid by the employer was Rs.1,20,000/whereas 10% salary of the employee came to Rs. 14,01,878/as such, the rent paid by the employer being less than 10% of the salary of the employee, the perquisite value of the accommodation was liable to be computed at Rs.1,20,000/. Accordingly, the ITAT held that as per the amended Rule 3, the perquisite value of the accommodation given by the assessee is li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accommodation is taken on lease or rent by the employer ............... Actual amount of lease rental paid or payable by the employer or 10% of salary whichever is lower as reduced by the rent, if any, actually, paid by the employee. .................. (3) .................. .................. .................. 9. Thus, on a plain reading of Rule 3, it is seen that the perquisite value of the residential accommodation provided by the employer is to be computed on actual amount of lease rental paid or payable by the employer and not on notional basis. Therefore, in our opinion, the contention of the revenue that the notional interest on the deposits paid by the employer to the landlord has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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