BIRLA VIDYUA NIKETAN vs. INCOME TAX OFFICER

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ITA - 864 / 2007HC Delhi13 September 20078 pages
For Petitioner: K.SAMPATH
AI SummaryDismissed

What did the High Court hold?

The High Court upheld the Tribunal's decision, finding that the Assessee's interpretation of the proviso to Rule 3(5) was incorrect. The court determined the value of the perquisite based on the cost of similar education in the locality, considering it a question of fact.

What were the facts?

The Assessee, Birla Vidya Niketan, appealed against the Tribunal's order concerning the valuation of perquisites for free or concessional educational facilities provided to employees' children. The Assessee argued that a proviso to Rule 3(5) of the IT Rules applied, exempting benefits under Rs. 1,000 per month.

What were the issues?

Whether the proviso to Rule 3(5) of the IT Rules exempts the perquisite value of educational facilities below Rs. 1,000 per month. Whether the valuation of such perquisites based on local educational costs raises a substantial question of law.

Which sections of the Income-tax Act were involved?

Section 260-A

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. 864 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:10217-DB

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the proviso to Rule 3(5) of the Act. It was the Assessee's case that the proviso to Rule 3(5) applies and that since the value of the benefit that did not exceed Rs.1,000/- per month, the substantive portion of Rule 3(5) of the IT Rules was not apply. This was negatived by the Tribunal, and in our view rightly.

For ready reference, Rule 3(5) reads as under:

"(5) The value of benefit to the employee resulting from the provision of free or concessional educational facilities for any member of his household shall be determined as the sum equal to the amount of expenditure incurred by the employer in that behalf or where the educational institution is itself maintained and owned by the employer or where free educational facilities for such member of employees' household are allowed in any other educational institution by reason of his being in employment of that employer, the value of the perquisite of the employee shall be determined with reference to the cost of such education in a similar institution in or near the locality. Where any amount is paid or recovered from the employee on that account, the value of benefit shall be reduced by the amount so paid or recovered.

Provided that where the educational institution itself or maintained and owned by the employer and free educational facilities are provided to the children of the employee or where such free educational facilities are provided in any institution by reason of his being in employment of that employer, nothing contained in this sub-

2007·DHC·10217-DI

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

- 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.

ê ª

S. MURALIDHAR, J.

MADAN B.LOKUR, J.

September 13, 2007 rk

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