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TMI Blog2000 (11) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... all to show cause against such enhancement. 3. Without prejudice to the above ground of appeal, the learned CIT(A) has erred on facts and in law in not accepting the alternative ground of appeal that the value of this perquisite should have been taken at 10% of the salary after allowing deduction under section 10(6)(viia). 4. The learned CIT (Appeals) erred on facts and in law in not accepting the assessee s contention that interest under section 234B was not chargeable when the assessee derived income only under the head Salaries on which tax is deductible at source. 2. Mr. H. Itoh, the appellant is a Japanese Technician who is in employment with Mitsui Engineering and Shipbuilding Co. Ltd. The appellant was provided hotel accommodation for which employer paid rent of ₹ 150 per day. The appellant claimed the rent as be exempt under section 10(14) of the I.T. Act. The Assessing Officer observed that the provisions of section 10(14) are amended with retrospective amendment and according to the amended provision, the appellant does not fulfil the conditions laid down under section 10(14) of the Act. The Assessing Officer observed that since the appellant availed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(iii ) is applicable on the fact and circumstances of the case. Learned counsel, however, pleaded that the appellant is entitled for deduction of salary to the tune of ₹ 48,000 under section 10(6)(viia) of the I.T. Act. Learned counsel pleaded that the appellant is entitled for deduction of this amount of salary for calculation of perquisite. 5. The learned counsel also pleaded that the Assessing Officer was not justified in charging interest under section 234B. Learned counsel pleaded that his income is not subject to payment of advance tax and TDS was deducted from the salary by the employer. Learned counsel pleaded that sections 215 and 234B are pari on similar footing because one has to look into section 209 and applicability of section 209 before interest under section 234B is charged. The learned counsel relied on the decision of Sedco Forex International Drilling Inc. v. Dy. CIT [2000] 72 ITD 415 (Delhi). 6. The learned DR, on the other hand, pleaded that section 17(2) of the I.T. Act is squarely applicable on the facts and circumstances of the case. The learned DR pleaded that the authorities below were justified in estimating perquisite because it was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and circumstances of the case, the rent free accommodation by way of hotel accommodation provided to the employee is to be calculated as a perquisite as envisaged under section 17(2) of the I.T. Act. 8. The second point taken by the learned counsel relates to the claim of deduction to be given regarding the portion of salary which is exempt under section 10(6)(viia). Once it is decided that the hotel accommodation is perquisite, we have to give a finding regarding the calculation of the perquisite. The perquisites are to be valued in accordance with the Income-tax Rules and Rule 3 is the relevant Rule applicable on facts and circumstances of the case. Rule 3(a) speaks that the value of rent free residential accommodation shall be determined on the basis provided in various sub-sections of the Rule. The salary has a different definition for the purpose of valuation of perquisite. The salary is defined in explanation (1) to Rule 3(a) of the I.T. Rules and explanation (1) speaks as follows :- Explanation 1 : Salary includes the pay, allowances, bonus or commission payable monthly or otherwise, but does not include the following, namely:- (i )dearness allowance or dearn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessed tax has been defined under section 234B as tax on total income determined on regular assessment as reduced by the amount of tax deducted or collected at source. Whereas according to learned CIT(A), section 215(5) speaks of tax deductible, he has observed that no tax was deducted or collected at source and therefore, appellant was liable to levy interest under section 234B. The learned counsel pleaded that in fact, the tax was deducted and paid which is borne out by the calculation shown at page 1 of the paperbook. This issue has come before the ITAT in Sedco Forex International Drilling Inc. (supra). Section 234B sub-section (1) explanation (1) defines assessed tax. The assessed tax is defined as follows:- Explanation 1. - In this section, assessed tax means,- (a )for the purposes of computing the interest payable under section 140A, the tax on the total income as declared in the return referred to in that section; (b)in any other case, the tax on the total income determined under sub-section (1) of section 143 or on regular assessment, as reduced by the amount of tax deducted or collected at source in accordance with the provisions of Chapter XVII on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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