G.L. Garoo, AM. - (1.) THE appellant filed appeal against the order passed by the CIT (A) vide appeal No. 90/92-93 dt. 18th Feb., 1993. THE appellant took various grounds in appeal which are reproduced as follows ; "1. THE learned CIT(A) has erred on facts and in law in taxing the amount of Rs. 45,846 as perquisite value of hotel accommodation provided to the assessee by the employer and in not accepting the assessee's contention that it is not taxable at all.
(2.) Without prejudice to the above ground of appeal, the learned CIT(A) has erred on facts and in law in enhancing the value of perquisite in respect of hotel accommodation from Rs. 28,653 as assessed by the AO to Rs. 45,846 thus resulting in enhancement of assessment without giving any opportunity at all to show cause against such enhancement. Without prejudice to the above ground of appeal, the learned CIT(A) has erred on facts and in law in not accepting the alternative ground of appeal that the value of this perquisite should have been taken at 10 per cent of the salary after allowing deduction under Section 10(6)(viia).
(3.) THE learned CIT(A) erred on facts and in law in not accepting the assessee's contention that interest under Section 234B was not chargeable when the assessee derived income only under the head 'Salaries' on which tax is deductible at source." 2. Mr. H. Itoh, the appellant is a Japanese technician who is in employment with Mitsui Engineering and Shipbuilding Co. Ltd, THE appellant was provided hotel accommodation for which employer paid rent of Rs. 150 per day. THE appellant claimed the rent as be exempt under Section 10(14) of the IT Act. THE AO observed that the provisions of Section 10(14) are amended with retrospective amendment and according to the amended provision, the appellant does not fulfil the conditions laid down under Section 10(14) of the Act. THE AO observed that since the appellant availed the perquisite in shape of rent-free accommodation, furniture and fixture, gas, water, electricity, facility of servant, etc., such perquisite will be treated as income of the appellant. THE AO worked out the perquisites at 12,5 per cent of the salary drawn by the appellant. Aggrieved against the order passed by the AO, the appellant filed appeal before the CIT(A). Before the CIT(A), appellant took plea that payment of hotel rent by the employer cannot be treated as perquisite. THE second point taken before the CIT(A) was that while computing the perquisite, the appellant should have been allowed deduction under Section 10(6)(viia) of the IT Act. THE appellant relied on the decision of CIT v. D.S. Blackwood (1989) 178 ITR 470 (Cal), THE CIT(A) observed that this case can be distinguished because the assessee came to India on tour and not on regular employment whereas the appellant stayed in India as an employee on regular basis. THE CIT(A) also observed that Section 10{14) is not applicable because the allowances granted by the employer and incurred wholly and exclusively for the purpose of employment will be exempt only if these allowance are notified by the Central Government. THE Central Government has not issued any notification regarding allowances of hotel rent and as such, they are not exempt under Section 10(14) of the Act. THE CIT(A) observed since composite facilities were provided by the employer, therefore, perquisite will be valued at 20 per cent of the salary which resulted into enhancement of perquisite by Rs. 17,193. THE AO as well as the CIT(A) rejected the plea regarding deduction of exemption under Section 10(6)(viia) from the salary calculation of perquisite as same is not supported by law. Aggrieved against the order of the CIT(A), the appellant is before us. 3. Learned counsel of the appellant pleaded that the appellant was provided hotel accommodation at the project site. THE learned counsel pleaded that perquisite in shape of rent-free accommodation provided at a place other than headquarters cannot be treated as perquisite envisaged under Section 17(2) of the IT Act. 4. THE learned counsel also pleaded that in case perquisite is to be valued and calculated, same should be calculated in accordance with IT Rules. THE learned counsel pleaded that for valuation of perquisite, Rule 3(a)(iii) is applicable on the fact and circumstances of the case. Learned counsel, however, pleaded that the appellant is entitled for deduction of salary to the tune of Rs. 48,000 under Section 10(6)(viia) of the IT Act. Learned counsel pleaded that the appellant is entitled for deduction of this amount of salary for calculation of perquisite.;