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TMI Blog1992 (10) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 9 of the U. P. Urban Building Act, 1972 ?" Briefly stated, the facts are as follows : The assessee is the managing director of M/s. Modi Industries Ltd., Modinagar, and had been assessed as an individual for the assessment years 1970-71 to 1972-73 under reference. The company provided the assessee with rent-free accommodation in Modi Bhavan No. 1, Modi Nagar. The rent-free accommodation consisted of two bed rooms with attached bath and dressing rooms, a living room, a store, a dining room and kitchen. The value of this rent-free accommodation was declared by the assessee and estimated by the Income-tax Officer and the Appellate Assistant Commissioner for the three years under appeal as follows : ------------------------ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worked out the value of the perquisites as per rule 3(a) of the Income-tax Rules, 1962, which action was also according to him approved by the Tribunal in the said case of Shri M. L. Modi. For these reasons, the Appellate Assistant Commissioner held that the Income-tax Officer was perfectly justified in taking the value of the perquisite in the shape of rent-free accommodation at 12.5 per cent. of the salary received by the assessee. The assessee brought the matter in appeal, to the Appellate Tribunal. The Tribunal found that the standard rent for similar accommodation occupied by Shri K. K. Modi had been fixed by the prescribed authority under section 9 of the U. P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 (13 of 1972), in the case of Shri K. N. Modi. While coming to the aforesaid conclusion, the order of the Rent Controller in the case of K. K. Modi whereby, a standard rent of Rs. 400 per month had been fixed on an application filed under section 9 of the U. P. Urban Buildings ( Regulation of Letting, Rent and Eviction ) Act, 1972, was referred to. In the said order, it was mentioned that the inspector had considered all the relevant facts which had to be taken into consideration under section 9 and had recommended that the standard rent should be fixed at Rs. 200 per month. This report of the inspector was dated August 28, 1973. The Sub-Divisional Magistrate, however, himself considered the facts of the case and came to the conclusion t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 81] 129 ITR 67 (Delhi) was that the premises had been given to the assessee at a concessional rate. In the present case, however, the report of the inspector in the year 1973 was that the fair rate of rent should be Rs. 200 per month. The Sub Divisional Magistrate applied his own mind and keeping in view the market rents which were prevalent in Modi Nagar, he came to the conclusion that the fair rent should be Rs. 400 and not Rs. 200 per month. This is a finding of fact which was not challenged and the Tribunal having come to the conclusion that the order of the Sub-Divisional Magistrate was not collusive and no question of law in relation thereto having been sought, we have to proceed on the basis that the fair market rent in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lmia v. CIT [1982] 138 ITR 653 in which a Division Bench of this court came to the conclusion that, when the property belonging to the company is allowed to be used by a director, then even though it may not be a case of letting out, the value of the rent-free accommodation has to be determined as per the decision of the Supreme Court in the case of Dewan Daulat Rai Kapoor's case [1980] 122 ITR 700 and the standard rent will determine the value. To this extent, the decision of a Division Bench of this court in J. Dalmia's case [1982] 138 ITR 653 is at variance with the decision in Murlidhar Dalmia's case [1981] 129 ITR 67 (Delhi). For the aforesaid reasons, the question of law is answered in the affirmative and in favour of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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