CIT vs. ADAM ROBERT JOHN MYNOTT

PDF · subscribers
ITA/1990/2010HC DelhiDLHC01124101201003 August 2012Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE R.V.EASWAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the tax paid by the employer on the rent-free accommodation benefit is exempt. This aligns with the interpretation of Rule 3 of the Income Tax Rules and previous court decisions.

What were the facts?

The Revenue appealed against the ITAT's decision to dismiss its appeal. The core issue was whether tax paid by an employer on rent-free accommodation provided to an employee was taxable or exempt.

What were the issues?

The primary issue was the taxability of the employer's payment of tax on the perquisite of rent-free accommodation provided to an employee.

Which sections of the Income-tax Act were involved?

Section 10(10CC)

AI-generated summary — verify with the full judgment below

ITA 1990/2010

Page 1 of 2

$~92 * IN THE HIGH COURT OF DELHI AT NEW DELHI

Dated of decision: 3rd August, 2012 + ITA 1990/2010

CIT

.....Appellant Through: Ms. Rashmi Chopra, Sr. Standing Counsel.

versus

ADAM ROBERT JOHN MYNOTT ..... Respondent Through: Ms. Shashi M. Kapila, Sr. Adv. with Mr. Pravesh Sharma and Ms. Radhika Narang, Advocates.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT

HON'BLE MR. JUSTICE R.V.EASWAR

S. RAVINDRA BHAT, J.: (OPEN COURT)

1.

The Revenue claims to be aggrieved against the decision of the Income Tax Appellate Tribunal („ITAT‟ for short) dated 08.02.2010 whereby its appeal, directed against the Commissioner of Income Tax (Appeals) order was dismissed.

2.

The only issue which arises for consideration is whether the tax paid on the facility of rent free accommodation, by the employer, to the extent i.e. the sum of `1,05,765/-, is itself taxable or is it exempt. The CIT (Appeals) by the order impugned before the Tribunal held as follows: - “5. I have considered the submissions made by the appellant and the assessment order. The only issue of dispute in this case is that out of the tax borne by the employer on monetary as well as non monetary benefits, the assessee claimed a sum of `1,05,765/- as exempt stating that this relates to the non monetary benefits and therefore, was exempt u/s 10(10CC) of the I.T. Act and should not be subjected to

ITA 1990/2010

Page 2 of 2

grossing up whereas the AO has stated in his assessment order that the benefit (rent free accommodation), considered by the assessee as non- monetary is a monetary benefit and therefore, tax paid by the employer in respect of this benefit is not eligible for exemption u/s 10(10CC) and is to be grossed up.”

3.

This Court notices that the combined reading of Rule 3 of Income Tax Rules, 1962 excludes the tax components borne in respect of the perquisite and rent free accommodation paid by the employer and this position appears to have been considered and benefit given by this Court in CIT v. Telsuo Mitera, ITA No.323/2010 and other connected cases decided on 17.05.2012.

4.

In view of the above discussion, the Revenue‟s appeal has to fail. The same is accordingly dismissed.

S. RAVINDRA BHAT, J

R.V.EASWAR, J AUGUST 03, 2012 hs

More judgments on Section 10(10CC)

All 27 judgments and leading authorities on Section 10(10CC) →

Recent GST High Court judgments

Search GST case law →