M.P. RATHI v. INCOME TAX OFFICER - 1985-LL-0807-7

Citation	1985-LL-0807-7
Appellant Name	M.P. RATHI
Respondent Name	INCOME TAX OFFICER
Court	ITAT
Relevant Act	Income-tax
Date of Order	07/08/1985
Assessment Year	1980-81
Judgment	View Judgment
Keyword Tags	residential accommodation • fair rental value • concessional rent • rent controller • house property • standard rent • monthly rent • net value
Bot Summary:	In appeal the AAC held that the fair rental value of the house property given to the assessee on payment of a monthly rent of Rs. 30 was Rs. 3,000. After giving credit for the rent of Rs. 30 p.m. paid by the a s s e s s e e and the value of perquisite on account of concessional accommodation shown by the appellant in the return of income, the net value of the perquisite assessable under r. 3 was determined at Rs. 1,079. It is in the background of the above mentioned facts that the assessee is in appeal before us contending that the accommodation provided to him by its employer M/s Gwalior Rayon was not on any concessional rent and that the rent thereof which could be charged from the assessee under the rent control laws of the Madhya Pradesh was only Rs. 30 p.m. In support of this contention Shri N.K. Bhuraria, ld. Authorised counsel of the assessee has produced before us an order of the Tribunal in ITA No. 4989/D/1984 in the case of one Mr. M.P. Halwai, a n employee of J.C. Mills of Birlangar, Gwarlior, where it was held that the monthly rent of Rs. 30 charged from that assessee was not a concessional rent liable to assessment as perquisite under r. 3. Mr. Bhuraria has also referred to us an order of the Rent Officer of Gwalior where it had been held that the rent of premises No. 5, Gwalior Rayon Colony, occupied by one Mr. H.P. Mawadia, another employee of Gawalior Rayan was only Rs. 30 p.m. As per certificate issued by M/s Gwalior Rayon the premises occupied by the assessee and H.P. Mawadia were similar. On the basis of the above, it has been contended by Shri Bhuraria that the AAC had no justification in assessing an income of Rs. 1,079 on account of perquisite in the shape of accommodation granted on concessional rate. Departmental Representative, has supported the order passed by the AAC. Inasmuch as we are satisfied that the provisions of Rent Control Act were applicable to the premises situate in Gwalior Rayon Colony which were partly let out to the employees of Gwalior Rayon and partly to the outsiders and also on account of the facts that in respect of a similar accommodation the rent controller of Gwalior had fixed the standard rent at Rs. 30 p.m., we do not see any justification for the assessment of any perquisite in the shape of the accommodation allegedly provided on concessional rent.

assessee appellant is employee of Gwalior Rayon, Birlangar, Garlior. In assessment originally made under s. 143(1) for asst. yr. 1980- 81, no addition had been made to its total income on account of any perquisite in t h e shape of residential accommodation provided on concessional rate. Subsequently when assessment was re-opened under provisions of s. 143(2)(b) and re-completed under provisions of s. 143(3), ITO assessed perquisite of Rs. 5,220 under provisions of r. 3 of IT Rules, 1962, on ground that rent of premises which had covered area of 870 sq. feet provided to assessee by its employer M/s Gwalior Rayan was Rs. 5,220 per annum @ 50 paisa per sq. feet. In appeal AAC held that fair rental value of house property given to assessee on payment of monthly rent of Rs. 30 was Rs. 3,000. After giving credit for rent of Rs. 30 p.m. paid by a s s e s s e e and value of perquisite on account of concessional accommodation shown by appellant in return of income, net value of perquisite assessable under r. 3 was determined at Rs. 1,079. It is in background of above mentioned facts that assessee is in appeal before us contending that accommodation provided to him by its employer M/s Gwalior Rayon was not on any concessional rent and that rent thereof which could be charged from assessee under rent control laws of Madhya Pradesh was only Rs. 30 p.m. In support of this contention Shri N.K. Bhuraria, ld. authorised counsel of assessee has produced before us order of Tribunal in ITA No. 4989/D/1984 in case of one Mr. M.P. Halwai, n employee of J.C. Mills of Birlangar, Gwarlior, where it was held that monthly rent of Rs. 30 charged from that assessee was not concessional rent liable to assessment as perquisite under r. 3. Mr. Bhuraria has also referred to us order of Rent Officer of Gwalior where it had been held that rent of premises No. 5, Gwalior Rayon Colony, occupied by one Mr. H.P. Mawadia, another employee of Gawalior Rayan was only Rs. 30 p.m. As per certificate issued by M/s Gwalior Rayon premises occupied by assessee and H.P. Mawadia were similar. On basis of above, it has been contended by Shri Bhuraria that AAC had no justification in assessing income of Rs. 1,079 on account of perquisite in shape of accommodation granted on concessional rate. On other hand, Shri S.K. Bensal, ld. Departmental Representative, has supported order passed by AAC. Inasmuch as we are satisfied that provisions of Rent Control Act were applicable to premises situate in Gwalior Rayon Colony which were partly let out to employees of Gwalior Rayon and partly to outsiders and also on account of facts that in respect of similar accommodation rent controller of Gwalior had fixed standard rent at Rs. 30 p.m., we do not see any justification for assessment of any perquisite in shape of accommodation allegedly provided on concessional rent. order of AAC is, therefore, disapproved and assessment of Rs. 1,079 is vacated. appeal is allowed. *** M.P. RATHI v. INCOME TAX OFFICER

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