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TMI Blog2016 (6) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... we hold that the contention of the authorities below that notional interest on the deposit paid by the employer to the landlord for securing accommodation while computing the perquisite value of the residential accommodation is to be included in the assessee’s income is not sustainable in view of the express words used in Rule 3 of the I.T. Rules, 1962 as amended w.e.f. 01.04.2001 and accordingly direct the AO to delete the addition made in this regard. - Decided in favour of assessee. - ITA No. 6591/Mum/2014 - - - Dated:- 3-6-2016 - SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER For the Petitioner : Appellant: Shri Himesh G. Thanawala For the Respondent : Respondent: Shri S.R. Kirtane O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following ground: - The Learned CIT(A), failed to appreciate and did not honor the respected Bombay High Court Judgement dated 06.09.2011, in case of CIT-26 versus Shankar Krish Nan that Notional Interest on Deposit given by employer securing rented premises should not be treated as perquisite value, therefore addition of ₹ 2,40,000/- should be deleted entirely. 3.1.2 The learned A.R. for the assessee was heard in support of the grounds raised. It was submitted that the facts of the matter are that in the period under consideration the assessee s employer had provided accommodation to the assessee for which the employer paid the landlord an annual rent of ₹ 2,10,000/- and a security deposit of ₹ 2,10,000/-. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord, including the judicial decision cited (supra). Admittedly, the assessee s employer, i.e. M/s. Kotak Investment Advisors Ltd., had provided rent free accommodation to assessee for which it paid rent of ₹ 2,10,000/- and a deposit of ₹ 20,00,000/-. As per the records in Form No. 12BA, it was seen that the perquisite value of rent paid of ₹ 2,10,000/- was considered in the hands of the assessee. The authorities below were of the view that the perquisite value of the deposit of ₹ 20,00,000/- was also to be considered as perquisite and proceeded to value the same notionally @12% of the deposit, i.e. ₹ 2,40,000/- as exigible to tax in the assessee s hands. The contention of the assessee is that notional interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bombay High Court in the case of CIT vs. Shankar Krishnan in ITA No. 3516/2010 dated 06.09.2011 (supra), we hold that the contention of the authorities below that notional interest on the deposit of ₹ 20,00,000/- paid by the employer to the landlord for securing accommodation while computing the perquisite value of the residential accommodation is to be included in the assessee s income is not sustainable in view of the express words used in Rule 3 of the I.T. Rules, 1962 as amended w.e.f. 01.04.2001 and accordingly direct the AO to delete the addition of ₹ 2,40,000/- made in this regard. Consequently, the assessee s ground of appeal is allowed. 4. In the result, the assessee s appeal for A.Y. 2009-10 is dismissed. Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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