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TMI Blog1983 (9) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... nd other sources. During the relevant previous year, the assessee was occupying a residential accommodation in Manek Building at Nepean Sea Road, Bombay, provided by his employer. The municipal valuation of the accommodation was Rs. 7,716 only and the perquisite value was returned by the assessee on this basis. The ITO relying upon Explanation 2 to rule 3(a) of the Income-tax Rules, 1962 ('the Rules'), estimated the market rent of the property at Rs. 48,000, and after the statutory deductions, arrived at the net assessable value of the perquisite at Rs. 16,800. 4. The Commissioner (Appeals) did not go into the merits of the question as he found that the issue is decided against the assessee by the decision of the Tribunal in the case of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermining the perquisite value at the rent fetched by similar accommodation or municipal rent, whichever is higher and that there is, therefore, no scope for adopting standard rent for determining the perquisite value. It was also contended by the department that the decision of the Tribunal for the assessment year 1976-77 holds good. The learned departmental representative also relied upon the ruling in the case of Murlidhar Dalmia v. CIT [1981] 129 ITR 67 (Delhi). 7. In reply, it was contended by the learned representative for the assessee that the rulings of the Supreme Court, relied on by him, should prevail over the decision of the High Court relied upon by the learned departmental representative, that what is required under Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoking the rent control law in determining the rental value. This ruling is not applicable to the facts of the present case. 10. We would now consider the effect of the rulings of the Supreme Court in the case of Mrs. Sheila Kaushish. In the case of Amolak Ram Khosla the Supreme Court had merely followed the decision in the case of Mrs. Sheila Kaushish. The question that arose for consideration in the case of Mrs. Sheila Kaushish was the determination of the annual value of a house property under sections 22 and 23 of the Income-tax Act, 1961 ('the Act'). Section 23, so far as it is relevant for the present purpose, provided that the annual value of the property shall be deemed to be the sum for which the property might reasonably be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention raised in the grounds of appeal that the rental value should be determined on the basis of the standard rent. It was contended by the learned representative for the assessee that the expression 'the rent which a similar accommodation would realise in the same locality' occurring in Explanation 2 to rule 3(a) carries the same connotation as the expression 'the sum for which the property might reasonably be expected to let' occurring in section 23. We are inclined to accept this submission. In our view, the expression 'the rent which a similar accommodation would realise in the same locality' occurring in Explanation 2 to rule 3(a) can be equated with the expression 'the sum for which the property might reasonably be expected to let' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the light of the ruling of the Supreme Court the annual value of the property for the purpose of assessment of the employer will be based on the standard rent and there appears to be no justification for adopting a different rental value for the purpose of assessment of the employee who has been allowed the use of the building free of rent. 13. We, therefore, hold that the perquisite value of the rent-free accommodation has to be determined on the basis of the standard rent of the flat. The same may be taken as Rs. 1,870 as computed by the registered valuer subject to further verification by the ITO with regard to the correctness of the calculation. 14. In the result, the appeal is allowed to the extent indicated above. - - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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