9911796707
TMI Blog1983 (11) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... r the year 1974-75 was accepted initially u/s. 143(1) of the Act. Thereafter, in the proceedings u/s. 143(2)(b) of the Act, the ITO noticed that the assessee had received benefit of free use of car and unfurnished accommodation in respect of which the employer had paid rent as a result of which the assessee had failed to disclose the perquisite on account of free use of car amounting to Rs. 1800 and rent free accommodation amounting to Rs. 15,294 for the asst. yr. 1974-75. Similarly, for the asst. yr. 1975-76 according to the ITO the assessee had failed to disclose the full value of perquisites amounting to Rs. 13,800. In this view of the matter, the ITO brought to the tax the aforesaid amounts representing value of perquisites and also ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other words, according to the ld. departmental representative, there was duty or obligation cast upon the assessee to file the return correctly in accordance with the provisions of the Act, and the Rules made thereunder. The value of rent free accommodation as disclosed by the assessee was not in accordance with r. 2 of the IT rules and therefore the understatement of value of perquisite for both the years clearly made the assessee exigible to penalty. 6. Shri. J. P. Shah on the other hand pointed out that the assessee has submitted the return of income on the basis of the certificate issued by the company of which he was a Managing Director. The certificate issued by the company clearly showed that the value of perquisite was adopted fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e meaning of s. 271(1)(c) of the Act. The value of perquisite in respect of rent free accommodation has to be determined in accordance with r. 3(iii)(A). The relevant provisions of which are set out hereunder : (iii) in any other case— (A) the value of rent-free residential accommodation which is not furnished shall ordinarily be a sum equal to 10% of the salary due to assessee in respect of the period during which the said accommodation was occupied by him during the previous year : Provided that — (1) Where the fair rental value of the accommodation is in excess of 20 per cent of the assessee 's salary, the value of the perquisite shall be taken to be 10 per cent of the salary increased by a sum equal to the amount by which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h fair rental value. This rule therefore, stipulates the computation of value of perquisite on the basis of fair rental value which has to be determined by the ITO having regard to the nature of the accommodation and also gives option to the assessee with which the ITO has to be satisfied. This proviso therefore clearly indicates that the valuation of perquisite is a subject matter of determination by the ITO and not necessarily required to be disclosed by the assessee. At the time of making the return the assessee has disclosed the value of perquisite on the basis to be employed ordinarily, i.e. 10% of the income from salaries. In other words this is not a case where the assessee had failed to disclose the value of perquisite at all. In wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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