Law:

Section:

Section 17(2) of the Income-tax Act, 1961 read with rule 3 of the Income-tax Rules, 1962 - Perquisites - Valuation of - Assessment years 1970-71 to 1972-73 - Assessee was managing director of a company and company provided him rent-free accommodation - Tribunal held that value of perquisites in respect of rent free residential accommodation was to be limited to rent fixed by prescribed authority under section 9 of the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 as was done in case of one K in identical circumstances - Whether Tribunal's finding was a finding of fact and could not be interfered with - Held, yes FACTS The assessee was provided rent-free residential accommodation by the company of which he was the managing director. The value of this accommodation, declared by the assessee for the assessment years 1970-71 to 1972-73 was not accepted by the ITO who estimated the same at 12.5 per cent of the salary received by the assessee for each of the three assessment years. The AAC confirmed the estimate of the ITO on ground that the decision of the ITO and the Tribunal, Delhi Bench 'C', dated 30-4-1974 in the case of M.L. Modi taking the value of the perquisite at 12.5 per cent of the salary was made in identical circumstances for the assessment years 1970-71 and 1971-72. In regard to the assessment year 1972-73, the AAC further observed that the ITO had 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 to the said case of M.L. Modi For these reasons, the AAC upheld the ITO's estimate. On second appeal, by the assessee, the Tribunal found that the standard rent of similar accommodation occupied by K had been fixed by the prescribed authority under section 9 at Rs. 400 p.m. Taking into consideration the extent of accommodation which was available with the assessee and applying the rate of rent which was determined in the case of K, the Tribunal in the present case came to the conclusion that the value of perquisites in the assessee's case in respect of the assessment year 1970-71 worked out to Rs. 1,418 while in respect of the…

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