BIRLA VIDYA NIKETAN vs. INCOME TAX OFFICER

PDF · subscribers
ITA - 863 / 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) of the IT Rules was not applicable as the employer did not provide free educational facilities. Consequently, the value of the concession was to be determined based on the substantive portion of Rule 3(5), considering the employer's expenditure.

What were the facts?

The assessee, Birla Vidya Niketan, provided concessional educational facilities to its employees' children. The Assessing Officer (AO) computed the taxable perquisite, but the Commissioner of Income Tax (Appeals) directed the AO to allow a surdeduction. The Income Tax Appellate Tribunal (ITAT) reversed the CIT(A)'s order.

What were the issues?

Whether the proviso to Rule 3(5) of the IT Rules applies to the concessional educational facilities provided by the employer, and how the value of the perquisite should be determined.

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

![](_page_0_Picture_1.jpeg)

IN THE HIGH COURT OF DELHI AT NEW DELHI

% Date of decision: September 13, 2007

ITA No. 863 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:10219-DB

Rule 3(5) of the IT Rules. The Assessing Officer was directed to allow surdeduction 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 We find that the case advanced by the Assessing before the

2007:DHC:10219-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 concessional fees charged to the children of the employee of the Assessee

11.

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

was also determined. These are pure questions of fact and do not raise any

12.

This appeal is dismissed.

question of law arises in this appeal.

substantial question of law.

ê ª

S. MURALIDHAR, J.

MADAN B.LOKUR, J.

September 13, 2007 rk

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →