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TMI Blog1983 (2) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... g styled "Silver Arch" situated at Napean Sea Road, Bombay, free of rent. Evidently, this was a perquisite in the hands of the assessee within the meaning of s. 17 of the IT Act, 1961. The value of this perquisite had to be determined in terms of Rule 3 of the IT Rules, 1962. The salary of the assessee was Rs. 48,000 per annum. 20 per cent of the said salary come to Rs. 9,600. The Municipal Rateable value for the flat under consideration was fixed at Rs. 12,033. 30 per cent of the assessee's annual salary worked out to Rs. 14,400. The assessee valued the perquisite under consideration at Rs. 4,800. He arrived at this figure by deducting the sum of Rs. 9,600 (20 per cent of salary) from Rs. 14,400 (30 per cent of salary). He adopted 30 per c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to his information, another building in the same locality was fetching a higher rent of Rs. 60,300 for the same area as that of the flat occupied by the assessee. In this view of the matter, he upheld the valuation of the perquisite as made by the ITO at Rs. 42,388. 3. Shri P.C. Mehra, the ld. representative for the assessee, urged before us that the revenue authorities erred in their decision. He took us through Rule 3 of the IT Rules, and stated that sub-clause (iii), of r. 3(a) applied to the facts of this case. That sub-clause says that the value of the rent free residential accommodation shall, ordinarily, be a sum equal to 10 per cent of the salary due to the assessee. The proviso says that where the fair rental value is in excess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 2 referred to above clearly states that the rent which a similar accommodation would realise in the same locality has to be determined and the ITO as well as the CIT(A) have shown that similar accommodation in the same locality actually got a rent higher than that estimated by the ITO. Under the circumstances he urged that the order of the CIT(A) deserved to be upheld. 5. Shri P.C. Mehra replied that the rent actually realised in the comparable accommodation in the same locality referred to in the order of the CIT(A) was not the rent legally realisable and so it represented only "fancy rent". According to the decisions of the Supreme Court cited earlier, he contended that the realisable rent in respect of a flat can only be the rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same locality" appearing in Explanation 2 to r. 3(A)(iii) can only mean the standard rent realisable under the appropriate Rent Control Act applicable to the premises under consideration. We do not agree with the contention of the assessee that the valuation of the perquisite should be limited to the Municipal Rateable Value, because the Explanation clearly states that if the other amount is higher than the Municipal Rateable Value, then the said higher figure should be taken. However, the other figure, namely, the Standard Rent under the Rent Control Act in respect of the premises under consideration has not been determined by the revenue authorities. We do not find any facts on record from which we can ourselves, determine the Stand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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