BIRLA VIDYA NIKETAN vs. INCOME TAX OFFICER

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ITA - 873 / 2007HC Delhi13 September 20078 pages
For Petitioner: K.SAMPATH
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the proviso to Rule 3(5) was not applicable as the employer did not provide free educational facilities. The High Court agreed that the determination of the perquisite value involved questions of fact and did not raise a substantial question of law.

What were the facts?

The assessee, Birla Vidya Niketan, provided concessional educational facilities to the children of its employees. The Assessing Officer treated this as a taxable perquisite, but the CIT(A) directed a deduction based on a proviso to Rule 3(5) of the IT Rules. The Tribunal reversed the CIT(A)'s order.

What were the issues?

Whether the proviso to Rule 3(5) of the IT Rules was applicable to the concessional educational facilities provided by the employer, and whether the determination of the perquisite value raised a substantial question of law.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF DELHI AT NEW DELHI

% Date of decision: September 13, 2007

ITA No. 873 of 2007

BIRLA VIDYA NIKETAN

....Appellant

Through: Mr. Krishan Mahajan with Mr.

K.Sampath, Advocates

versus

\$ INCOME TAX OFFICER

..... Respondent

Through Ms. P.L. Bansal, Advocate

CORAM:

HON'BLE MR. JUSTICE MADAN B.LOKUR HON'BLE DR. JUSTICE S. MURALIDHAR

ORDER

For orders, see ITA No. 868 of 2007.

S. MURALIDHAR, J.

MADAN B.LOKUR, J.

September 13, 2007 rk

![](_page_1_Picture_1.jpeg)

IN THE HIGH COURT OF DELHI AT NEW DELHI

% Date of decision: September 13, 2007

ITA No. 868 of 2007

BIRLA VIDYA NIKETAN .....Appellant

Through: Mr. Krishan Mahajan with Mr. K.Sampath, Advocates

versus

\$ INCOME TAX OFFICER ..... Respondent

Through Ms. P.L. Bansal, Advocate

CORAM:

HON'BLE MR. JUSTICE MADAN B.LOKUR HON'BLE DR. JUSTICE S. MURALIDHAR

1.

Whether Reporters of local papers may be allowed YES to see the judgment?

2.

To be referred to the Reporter or not? YES

3.

Whether the judgment should be reported in Digest? YES

: Dr. S. Muralidhar, J. (oral)

1.

This appeal under Section 260-A of the Income Tax Act, 1961 ('Act') is directed against a common order dated 23<sup>rd</sup> March, 2007 passed by the Income Tax Appellate Tribunal, Delhi Bench 'G' Delhi ('Tribunal') in I.T.A. Nos. 2272 to 2281(Del)/2006. Although 10 corresponding appeals have been filed by the Assessee, the present order is being passed in ITA No. 868 of 2007 relevant to financial year 2000-01. since common issues arise in all

2007:DHC:10214-DB

Rule 3(5) of the IT Rules. The Assessing Officer was directed to allow sure deduction while computing the taxable perquisite for the purposes of tax deduction under Section 201 (1) and interest thereon under Section 201(1A) of the Act.

- 6. In the appeal filed by the Revenue, the Tribunal came to the conclusion that the proviso to Rule 3(5) would not apply at all because the employer (Assessee) in the present case does not provide free educational facilities to children of its employees. If the proviso did not apply then it mattered little that value of the concession was less than Rs.12,000/- per annum. Accordingly, the Tribunal reversed the order of the CIT(A). - 7. Appearing for the Assessee, Mr. Krishan Mahajan and Mr. K.Sampath, Advocates submitted that the Tribunal had overlooked the substantive portion of Rule 3(5) of the IT Rules which required the value of the benefit to the employee to be determined as the sum equal to the amount of expenditure incurred by the employer towards concessional educational facilities. Where the educational institution is itself maintained and owned by the employer, the value of the perquisite had to be determined with reference to the cost of such education in a similar institution in or near the locality.

O 117 C 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

2007:DHC:10214-DB

what the value of the benefit to the employee was by making a reference to the cost of such education in a similar institution in or near the locality. This submission is without force since the calculations were before the Assessing Officer in the first instance and thereafter a report was called for from the Assessing Officer by the CIT (A). The extent of perquisite in the form of

sought to be contended that the Assessing Officer had failed to exami

concessional fees charged to the children of the employee of the Assessee was also determined. These are pure questions of fact and do not raise any

substantial question of law.

ê ª

11.

For the aforementioned reasons, we do not find any error in the impugned order of the Tribunal which is hereby affirmed. No substantial question of law arises in this appeal.

12.

This appeal is dismissed.

S. MURALIDHAR, J.

MADAN B.LOKUR, J.

September 13, 2007 rk

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