Commissioner of Income Tax vs Smt. Dayawati Modi

The question relating to the assessment year 1971-72 involved in this matter is as follows :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing that the value of perquisite for residential accommodation be limited to Rs. 12,691 ?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in directing that the value of the perquisite in the shape of rent-free accommodation be limited to the value fixed by the prescribed authority u/s 9 of the U. P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972, for the assessment year 1971-72 ?"

From the order passed by the Income Tax Appellate Tribunal it appears that the standard rent fixed under the provisions of the Rent Control Act had been considered to be the perquisite given to the assessed herein by way of rent-free house accommodation. The matter appears to be covered by a Division Bench decision of this court in Commissioner of Income Tax Vs. M.K. Modi, where this court has categorically held that when the property belonging to the company is allowed to be used by a director, then even though it may not be a case of letting out, the value of the rent-free accommodation has to be determined as per the decision of the Supreme Court in the case of Dewan Daulat Rai Kapoor and Others Vs. New Delhi Municipal Committee and Others, ) and the standard rent will determine the value. Following the aforementioned decision, we are of the opinion that the Tribunal was right in deciding the said question in favor of the assessed. This application is, thus, disposed of.