Sri.Madan Singh , Bangalore V. The Assistant Commissioner of Income Tax Ward-3(2)1, Bangalore

ITA 140/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2354 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 16-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: MADAN SINGH
• Keywords: Salary income; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1 40 /BANG/201 8 ASSESSMENT YEAR : 2014 - 15 SHRI MADAN SINGH, H-1801, THE GARDENS, KP AGRAHARA, MAGADI ROAD, BANGALORE 560 023. PAN: AHQPS7384C VS. THE INCOME TAX OFFICER, WARD 3 (2) (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI MADAN SINGH, CA RESPONDENT BY : DR. P.V. PRADEEP KUMAR, ADDL. CIT (DR) DATE OF HEARING : 19 . 0 7 .2018 DATE OF PRONOUNCEMENT : 31. 0 8 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME I S DIRECTED AGAINST THE ORDER OF LD. CIT(A)-10,BANGALORE DATED28.11.2017FOR ASSESSME NT YEAR 2014-15. 2. THE REVISED GROUNDS FILED BY THE ASSESSEE IS AVA ILABLE ON PAGE NO. 7 OF THE PAPER BOOK AND THE SAME AREAS UNDER. 1. TO QUASH THE ASSESSMENT ORDER SINCE THE ADDITION S MADE ARE ABSOLUTELY ARBITRARY AND ERRONEOUS. 2. CIT(A) ORDER TO CONFIRM ADDITION OF RS.30,15,000 /-, WHICH WAS GENUINE 'AGRICULTURAL INCOME', IS ARBITRARY, ERRONE OUS AND UNFAIR. THEREFORE, IT DESERVES TO BE QUASHED. AGRICULTURAL INCOME CONSISTS OF FOLLOWING TWO PARTS: 2.1 AGRICULTURAL INCOME OF RS.30.00,000/- RECEIVED AS SALE PROCEEDS OF 500 NO. OF EUCALYPTUS TREES (GROWN IN A GRICULTURAL LAND) @ AVERAGE PRICE OF RS.6,000/- PER TREE. 2.2 AGRICULTURAL INCOME OF RS.15,000/- RECEIVED AS ANNUAL RENT FOR ITA NO. 140/BANG/2018 PAGE 2 OF 11 USE OF AGRICULTURAL LAND TO GROW VARIOUS CROPS. 3. CIT(A) ORDER TO CONFIRM ADDITION OF RS.2,49,773/ - IS WITHOUT CONSIDERING ALL THE RELEVANT FACTS OF THE CASE, ARB ITRARY, ERRONEOUS AND UNFAIR. THEREFORE, IT DESERVES TO BE QUASHED. 4. ANY OTHER GROUNDS THAT MAY BE LET IN AT THE TIME OF HEARING. THE APPELLANT, THEREFORE, PRAY THAT THE APPEAL MAY BE ADMITTED AND ORDERS MAY BE PASSED TO QUASH THE ADDITIONS, RENDER ING JUSTICE TO THE APPELLANT. 3. THE LD. AR OF ASSESSEE SUBMITTED THAT ON PAGE NO . 154 OF PAPER BOOK IS A CERTIFICATE ISSUED BY PRADHAN GRAM PANCHAYAT AS PER WHICH IT IS CERTIFIED BY HIM THAT THE ASSESSEE IS A RESIDENT OF DIST. BIJNOR , UTTAR PRADESH AND IN THE VILLAGE, THE ASSESSEE HAS IRRIGATED AGRICULTURAL LA ND AND VARIOUS TREES WERE PLANTED IN THE SAID LAND. HE FURTHER SUBMITTED THA T ON PAGE NO. 185 OF PAPER BOOK IS THE ESTIMATE REGARDING SUGARCANE SUPPLY AND PAYMENT DETAILS IN THE PRESENT YEAR. IT WAS POINTED OUT THAT AS PER THE S AME, THE ESTIMATED SUPPLY IN THE PRESENT YEAR WAS 117 QUINTALS. AT THIS JUNCTUR E, A QUERY WAS RAISED BY THE BENCH THAT EVEN IF SOME SUPPLY HAS BEEN MADE BY ASS ESSEE TO SUGARCANE MILLS AS EVIDENCED BY THIS DOCUMENT THEN ALSO, IT HAS TO BE ESTABLISHED THAT SUCH SUPPLY IS OUT OF ACTUAL AGRICULTURAL PRODUCE ON THE LAND OWNED BY THE ASSESSEE. THE BENCH WANTED TO SEE THE DOCUMENTARY EVIDENCE IN THAT REGARD. BUT NO SUCH DOCUMENTARY EVIDENCE WAS PRODUCED AND MOREOVER , THE AGRICULTURAL INCOME HAS BEEN OFFERED BY ASSESSEE IN RESPECT OF S ALE OF TREES AND THEREFORE, SUPPLY OF SUGARCANE TO SUGARCANE MILL IS NOT RELEVA NT IN THE PRESENT CASE. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITI ES BELOW. 4. REGARDING THE SECOND ISSUE RAISED BY THE ASSESSE E AS PER GROUND NO. 3 OF THE REVISED GROUNDS OF APPEAL, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT RELIANCE IS PLACED ON A TRIBUNAL ORDER RENDERED IN THE CASE OF MRS. MANGHAL GAONKAR VS. ITO IN ITA NO. 5879/MUM/2009 DATED 27.08.2010, COPY AVAILABLE ON PAGES 171 TO 177 OF PAPER BOOK AND IN PARTICULAR OUR ATTE NTION WAS DRAWN TO PARA 12 OF THIS TRIBUNAL ORDER AND IT WAS SUBMITTED THAT IT WAS HELD IN THIS CASE BY TRIBUNAL THAT IN COMPUTING THE VALUE OF PERQUISITE FOR ACCOMMODATION PROVIDED BY THE CORPORATION, THE HRA WITHHELD SHOULD BE TREA TED AS AMOUNT RECOVERED ITA NO. 140/BANG/2018 PAGE 3 OF 11 BY THE EMPLOYER FOR PROVIDING ACCOMMODATION. HE SU BMITTED THAT IN THE PRESENT CASE ALSO, THE ISSUE SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE BY FOLLOWING THIS TRIBUNAL ORDER. THE LD. DR OF REVENUE SUPPORT ED THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER THE REVISED GROUNDS OF APPEAL REPRODUCED ABOVE, THERE ARE TWO I SSUES INVOLVED IN THE PRESENT CASE. THE FIRST ISSUE IS AS PER GROUND NO. 2 OF THE ASSESSEES APPEAL IN RESPECT OF AGRICULTURAL INCOME DECLARED BY THE ASSE SSEE OF RS. 30.15 LAKHS. THE SECOND ISSUE IS REGARDING ADDITION MADE BY THE AO OF RS. 2,49,773/- BY REJECTING THE CLAIM OF THE ASSESSEE THAT VALUE OF P ERQUISITES SHOULD BE REDUCED IN COMPUTING INCOME FROM SALARY. FIRST WE DECIDE TH E FIRST ISSUE I.E. REGARDING AGRICULTURAL INCOME. 6. IN THIS REGARD, WE FIND THAT THIS IS ADMITTED PO SITION OF FACT THAT ASSESSEE HAS NOT PRODUCED ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE EXISTENCE OF TREES ON THE LAND OWNED BY THE ASSESSEE APART FROM A CERTIFICATE FROM PADHAN GRAM PANCHAYAT AVAILABLE ON PAGE NO. 154 OF PAPER BOOK W HICH IS DATED 22.04.2012 AND THIS CERTIFICATE IS VERY VAGUE BECAUSE NEITHER THE AREA OF LAND IS SPECIFIED NOR THE NUMBER OF TREES STANDING ON SUCH LAND IS SP ECIFIED. EVEN THE AGE OF TREES IS ALSO NOT SPECIFIED. IT HAS BEEN SIMPLY ST ATED THAT ON THIS LAND, THERE ARE VARIOUS TREES WHICH ARE VERY BIG NOW. IT IS NOT CL EAR FROM THE CERTIFICATE AS TO FOR WHICH LAND THIS CERTIFICATE IS RELEVANT BECAUSE NO REFERENCE IS GIVEN ABOUT THE LAND IN QUESTION FOR WHICH THE CERTIFICATE IS ISSUE D. MOREOVER NAME, ADDRESS ETC. OF THE BUYERS OF TREES IS ALSO NOT BROUGHT ON RECORD BY THE ASSESSEE. IT IS ALSO SEEN THAT THE AO HAS NOTED IN THE ASSESSMENT O RDER THAT AS PER NABARD WEBSITE, IN ONE HECTARE OF LAND, YIELD CAN RANGE FR OM 50 MT TO 150 MT AT THE MAXIMUM. THEREAFTER IN PARAS 3.1 AND 3.2 OF THE AS SESSMENT ORDER, IT IS NOTED BY THE AO THAT AS PER THE ASSESSEE, THERE IS YIELD ABOUT 1000 MT PER HECTARE OF LAND WHICH IS TRULY EXORBITANT NEARLY TEN TIMES OF THE MAXIMUM YIELD PER HECTARE AS COMPARED TO THE STUDY REFERENCE AS PER NABARD WE BSITE AND THE AO HAS COME TO THE CONCLUSION THAT THE CLAIM OF ASSESSEE I S FAR FROM REALITY. FOR THE ITA NO. 140/BANG/2018 PAGE 4 OF 11 SAKE OF READY REFERENCE, WE REPRODUCE PARAS 3.1 AND 3.2 FROM THE ASSESSMENT ORDER. 3.1 THE ASSESSEE HAS SUBMITTED THAT EACH TREE HAS Y IELDED HIM ON AN AVERAGE RS. 6,000/- AND THAT HE HAS SOLD 500 TREES (HALF OF THE STANDING TREES) DURING THE FY 2013-14 WHICH HAS YIE LDED HIM RS. 30 LAKHS. THIS TRANSLATES TO A YIELD OF 1000 MT PER HE CTARE OF LAND WHICH IS TRULY EXORBITANT (NEARLY TEN TIMES THE MAXIMUM Y IELD PER HECTARE AS COMPARED TO THE STUDY REFERENCE INDICATED ABOVE) AN D THUS IS FAR 1: RAM REALITY. FURTHER THE ASSESSEE HAS DECLARED ADDITIONAL AGRICU LTURE INCOME OF R5.15,000/ STATING THAT LAND RENT RECEIVED FROM HIS BROTHER, SHRI ANAND DEV AS PER AGREEMENT ENTERED ON DATED 02/04/2 011 BEING VALID FOR A PERIOD OF 5YEARS FROM F.Y 2011-12 TO F.Y.2015 -16. ON PERUSAL OF THE AGREEMENT STATED ABOVE, IT WAS SEEN THAT THE SCHEDULE OF THE PROPERTY LIKE MEASUREMENT, BOUNDARY AND CONDITIONS OF THE LAND (STANDING CROP) HAS NOT BEEN MENTIONED. THIS CLEARL Y DEPICTS THAT ASSESSEE'S INTENTION IS TO CLAIM EXEMPTION OF TAXAB LE INCOME UNDER THE GARB OF AGRICULTURE PRODUCE. 3.2 CONCLUSION: FROM THE ABOVE DISCUSSION IT IS CLEAR THAT THE ASSE SSEE HAS FAILED TO PROVE THE EXISTENCE OF 1000 EUCALYPTUS TREES. THE M ERE SUBMISSION OF A CERTIFICATE FROM GRAM PRADHAN STATING THAT THERE EXISTED SOME EUCALYPTUS TREES WILL NOT STRENGTHEN THE CLAIM OF T HE ASSESSEE THAT 1000 TREES EXISTED. FURTHER IN SPITE OF INFORMING A SSESSEE TWICE, VIDE THIS OFFICE NOTICE DATED 15/12/2016 & 26/12/2016 TO PRODUCE THE NAME, ADDRESS AND CONTACT NUMBER OF THE BUYER OF CU T DOWN TREES, THE ASSESSEE COULD NOT PROVIDE THE SAME AND INSTEAD EXPRESSED HIS INABILITY TO PROVIDE ANY DETAILS. THEREFORE THE ASS ESSEE HAS TOTALLY FAILED TO PROVE HIS CLAIM WITH REGARD TO EXISTENCE AND SALE OF EUCALYPTUS TREES WITH CORROBORATIVE EVIDENCE TOWARD S CLAIM OF HUGE AGRICULTURAL INCOME. THE ASSESSEE HAS THUS FAILED T O PROVIDE CONCLUSIVE EVIDENCE AS RULED BY THE HON'BLE SUPREME COURT (SUPRA). HENCE THE ASSESSEE'S CLAIM OF PS.30.15 LAKHS AS AGR ICULTURAL INCOME IS DISALLOWED AND BROUGHT TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. ADDITION:RS.30,15,000/- AS THE ASSESSEE HAS FURNISHED INACCURATE PARTICULAR S OF HIS INCOME, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE IT ACT, HA S BEEN INITIATED FOR THE SAME. 7. WE NOW REPRODUCE PARA 5.1 FROM THE ORDER OF CIT( A) WHICH READS AS UNDER. 5. DECISION 5.1 DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE AO ASKED THE DETAILS OF THE EUCALYPTUS TREES AND WHETHER HE HAS RECEIVED ANY PERMISSION FOR CUTTING DOWN THE TREES. THE APPELLAN T REPLIED THAT NO ITA NO. 140/BANG/2018 PAGE 5 OF 11 SUCH PERMISSION WAS REQUIRED FOR EUCALYPTUS TREES. THEN THE AO ASKED TO GIVE DETAILS OF THE PURCHASERS OF CUT DOWN TREES TO WHICH HE SAID THAT THESE ARE NOT AVAILABLE WITH HIM. WHEN AS KED ABOUT THE MODE OF PAYMENT HE SAID THAT IT WAS RECEIVED IN CASH AND ONE MR. KRIPAL SINGH USED TO COLLECT THE SALE PROCEEDS FROM THE PU RCHASERS OF TREES AND KEEP IT IN A SAFE CUSTODY. THE APPELLANT FURTHE R SAID THAT THE CASH DEPOSIT IN HIS BANK ACCOUNT WAS FROM THE SALE PROCE EDS. HOWEVER, NO DOCUMENTARY PROOF OF THE SALE OF THE TREES WAS GIVE N TO THE AO. THE APPELLANT HAS NOT PROVED THE EXISTENCE OF ONE THOUS AND EUCALYPTUS TREES. DESPITE BEING GIVEN AMPLE OPPORTUNITIES TO P ROVE THE GENUINENESS OF THE CLAIM THE APPELLANT HAS NOT DISC HARGED THE BASIC ONUS AND HAS SIMPLY RELIED ON SOME DOCUMENTS WHICH CANNOT BE TERMED AS EVIDENCE. THE AO HAS MADE A DETAILED DISC USSION IN THE ASSESSMENT ORDER AND HAS PROVED THAT THE CLAIM MADE BY THE APPELLANT IS NOT TO BE BELIEVED THEREFORE, I DO NOT FIND ANY REASON TO INTERFERE WITH THE ASSESSMENT ORDER AND THE ADDITION MADE OF RS. 30,15,000/- IS HEREBY CONFIRMED. CONFIRMED - RS.30,15,000/- 8. FROM THE ABOVE PARAS REPRODUCED FROM THE ASSESSM ENT ORDER AND FROM THE ORDER OF CIT(A), IT COMES OUT THAT THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY EVIDENCE IN SUPPORT OF EXISTENCE OF TREES IN THE LA ND OWNED BY THE ASSESSEE AND MOREOVER, THE ASSESSEE IS ALSO NOT FURNISHING A NY EVIDENCE REGARDING THE BUYERS. IT IS THE STAND OF THE ASSESSEE THAT ONE M R. KRIPAL SINGH USED TO COLLECT THE SALE PROCEEDS FROM THE PURCHASERS OF TREES AND KEEP IT IN A SAFE CUSTODY AND THE ASSESSEE USED TO COLLECT IT FROM HIM. BUT NO CONFIRMATION OF THE SAID MR. KRIPAL SINGH IS BROUGHT ON RECORD IN SUPPORT OF THIS CONTENTION. MOREOVER THE CLAIM OF THE ASSESSEE IS VERY HIGH AS COMPARED TO NABARD WEBSITE BECAUSE AS PER THE NABARD WEBSITE AS STATED BY THE AO IN THE ASSESSMENT ORDER, THERE CAN BE 50 TO 150 MT OF YIELD PER HECTA RE BUT THE ASSESSEE IS CLAIMING YIELD OF 1000 MT PER HECTARE WHICH IS ABOU T TEN TIMES OF THE MAXIMUM YIELD AS PER NABARD WEBSITE. THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY OTHER EVIDENCE WHICH CAN SUPPORT THE CLAIM OF THE A SSESSEE THAT THE ASSESSEE IS HAVING YIELD OF 1000 MT PER HECTARE. CONSIDERIN G ALL THESE FACTS, WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE PARTICULARLY IN VIEW OF THIS FACT THAT AS PER JUDGEMENT OF HONBLE APEX COURT RE NDERED IN THE CASE OF CIT VS. RAMAKRISHNA DEO AS REPORTED IN 35 ITR 312, IT W AS HELD THAT THE ONUS OF ESTABLISHING THAT THE INCOME EARNED BY THE ASSESSEE IS AGRICULTURAL INCOME IS ENTIRELY ON THE ASSESSEE. THIS ISSUE IS DECIDED AG AINST THE ASSESSEE. ITA NO. 140/BANG/2018 PAGE 6 OF 11 9. NOW REGARDING THE SECOND ISSUE RAISED BY THE ASS ESSEE AS PER GROUND NO. 3, IT IS STATED BY THE ASSESSEE ON PAGE NO. 20 OF PAPER B OOK THAT SHRI RAHUL SINGH RANA SON OF ASSESSEE HAS ALREADY PURCHASED AN APART MENT (H-1801) AT MAGADI ROAD, BANGALORE JOINTLY WITH ASSESSEE AND TH E ASSESSEE PREFERRED TO STAY WITH HIS SON. IT IS ALSO SUBMITTED THAT RITES LTD. THE EMPLOYER OF THE ASSESSEE COMPANY HAS PROVISION OF SELF-LEASE IN CAS E OF RESIDENTIAL FLAT / APARTMENT OWNED BY IMMEDIATE FAMILY MEMBER OF EMPLO YEES AND ACCORDINGLY UNDER SELF-LEASE ARRANGEMENT, LEASE RENTAL @ RS. 32 ,580/PM WAS PAID BY RITES TO SON OF ASSESSEE AND IT WAS CREDITED TO HIS BANK ACCOUNT AFTER TDS AND INCOME FROM SUCH LEASE RENTAL WAS OFFERED BY AS SESSEE AND HIS SON IN PROPORTION TO THEIR HOLDING. SUCH LEASED HOUSE WAS PROVIDED BY RITES LTD. I.E. EMPLOYER OF ASSESSEE TO THE ASSESSEE FOR HIS ACCOMM ODATION INSTEAD OF PROVIDING HRA TO THE ASSESSEE. AS PER THE ASSESSEE , THE ASSESSEE WAS ENTITLED TO HRA OF RS. 2,30,931/- WHICH WAS NOT PAI D TO THE ASSESSEE BECAUSE ASSESSEE OPTED FOR LEASED ACCOMMODATION AND THIS IS THE CLAIM OF THE ASSESSEE THAT IN VALUING THE ACCOMMODATION, S UCH HRA OF RS. 2,30,931/- SHOULD BE REDUCED FROM RS. 2,49,773/- CONSIDERED AS PERQUISITE VALUE AND THE VALUE TO BE CONSIDERED SHOULD BE ONLY RS. 18,842/-. WE FIND THAT SUB-SECTION (2) OF SECTION 17 IS RELEVANT FOR VALUING THE PERQU ISITES VALUE OF RENT FREE ACCOMMODATION PROVIDED BY EMPLOYER TO ASSESSEE. TH E SAME IS REPRODUCED HEREINBELOW FOR READY REFERENCE. 17. (2) 'PERQUISITE' INCLUDES 18 (I) THE VALUE OF RENT-FREE ACCOMMODATION PROVIDED T O THE ASSESSEE BY HIS EMPLOYER; (II) THE VALUE OF ANY CONCESSION IN THE MATTER OF R ENT RESPECTING ANY ACCOMMODATION PROVIDED TO THE ASSESSEE BY HIS EMPLOYER; EXPLANATION 1.FOR THE PURPOSES OF THIS SUB-CLAUSE, CONCESSION IN THE MATTER OF RENT SHALL BE DEEMED TO HAVE BEEN PROVIDED IF, (A) IN A CASE WHERE AN UNFURNISHED ACCOMMODATION IS PROVIDED BY ANY EMPLOYER OTHER THAN THE CENTRAL GOVERNMENT OR ANY S TATE GOVERNMENT AND (I) THE ACCOMMODATION IS OWNED BY THE EMPLOYER, THE VALUE OF THE ACCOMMODATION DETERMINED AT THE SPECIFIED RATE IN R ESPECT OF THE PERIOD DURING WHICH THE SAID ACCOMMODATION WAS OCCU PIED BY THE ASSESSEE DURING THE PREVIOUS YEAR, EXCEEDS THE RENT RECOVERABLE FROM, OR PAYABLE BY, THE ASSESSEE; (II) THE ACCOMMODATION IS TAKEN ON LEASE OR RENT BY THE EMPLOYER, THE VALUE OF THE ACCOMMODATION BEING THE ACTUAL AMOUNT OF LEASE RENTAL PAID OR PAYABLE BY THE EMPLOYER OR FIFTEEN PER CENT OF SALARY, ITA NO. 140/BANG/2018 PAGE 7 OF 11 WHICHEVER IS LOWER, IN RESPECT OF THE PERIOD DURING WHICH THE SAID ACCOMMODATION WAS OCCUPIED BY THE ASSESSEE DURING T HE PREVIOUS YEAR, EXCEEDS THE RENT RECOVERABLE FROM, OR PAYABLE BY, THE ASSESSEE; (B) IN A CASE WHERE A FURNISHED ACCOMMODATION IS PR OVIDED BY THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT, THE LICENCE FEE DETERMINED BY THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT IN RESPE CT OF THE ACCOMMODATION IN ACCORDANCE WITH THE RULES FRAMED B Y SUCH GOVERNMENT AS INCREASED BY THE VALUE OF FURNITURE AND FIXTURES IN RESPECT OF THE PERIOD DURING WHICH THE SAID ACCOMMODATION WAS OCCUPIED BY THE ASSESSEE DURING THE PREVIOUS YEAR, EXCEEDS THE AGGREGATE OF THE RENT RECOVERABLE FROM, OR PAYABLE BY, THE ASSESSEE AND ANY CHARGES P AID OR PAYABLE FOR THE FURNITURE AND FIXTURES BY THE ASSESSEE; (C) IN A CASE WHERE A FURNISHED ACCOMMODATION IS PR OVIDED BY AN EMPLOYER OTHER THAN THE CENTRAL GOVERNMENT OR ANY STATE GOVE RNMENT AND (I) THE ACCOMMODATION IS OWNED BY THE EMPLOYER, THE VALUE OF THE ACCOMMODATION DETERMINED UNDER SUB-CLAUSE (I) OF CL AUSE (A) AS INCREASED BY THE VALUE OF THE FURNITURE AND FIXTURE S IN RESPECT OF THE PERIOD DURING WHICH THE SAID ACCOMMODATION WAS OCCU PIED BY THE ASSESSEE DURING THE PREVIOUS YEAR, EXCEEDS THE RENT RECOVERABLE FROM, OR PAYABLE BY, THE ASSESSEE; (II) THE ACCOMMODATION IS TAKEN ON LEASE OR RENT BY THE EMPLOYER, THE VALUE OF THE ACCOMMODATION DETERMINED UNDER SUB-CLA USE (II) OF CLAUSE (A) AS INCREASED BY THE VALUE OF THE FURNITU RE AND FIXTURES IN RESPECT OF THE PERIOD DURING WHICH THE SAID ACCOMMO DATION WAS OCCUPIED BY THE ASSESSEE DURING THE PREVIOUS YEAR, EXCEEDS THE RENT RECOVERABLE FROM, OR PAYABLE BY, THE ASSESSEE; (D) IN A CASE WHERE THE ACCOMMODATION IS PROVIDED B Y THE EMPLOYER IN A HOTEL (EXCEPT WHERE THE ASSESSEE IS PROVIDED SUCH ACCOMMO DATION FOR A PERIOD NOT EXCEEDING IN AGGREGATE FIFTEEN DAYS ON HIS TRAN SFER FROM ONE PLACE TO ANOTHER), THE VALUE OF THE ACCOMMODATION DETERMINED AT THE RATE OF TWENTY- FOUR PER CENT OF SALARY PAID OR PAYABLE FOR THE PRE VIOUS YEAR OR THE ACTUAL CHARGES PAID OR PAYABLE TO SUCH HOTEL, WHICHEVER IS LOWER, FOR THE PERIOD DURING WHICH SUCH ACCOMMODATION IS PROVIDED, EXCEED S THE RENT RECOVERABLE FROM, OR PAYABLE BY, THE ASSESSEE. EXPLANATION 2.FOR THE PURPOSES OF THIS SUB-CLAUSE, VALUE OF FURNITURE AND FIXTURE SHALL BE TEN PER CENT PER ANNUM OF THE COST OF FURNITURE (INCLUDING TELEVISION SETS, RADIO SETS, REFRIGERATORS, OTHER H OUSEHOLD APPLIANCES, AIR- CONDITIONING PLANT OR EQUIPMENT OR OTHER SIMILAR AP PLIANCES OR GADGETS) OR IF SUCH FURNITURE IS HIRED FROM A THIRD PARTY, THE ACT UAL HIRE CHARGES PAYABLE FOR THE SAME AS REDUCED BY ANY CHARGES PAID OR PAYABLE FOR THE SAME BY THE ASSESSEE DURING THE PREVIOUS YEAR. EXPLANATION 3.FOR THE PURPOSES OF THIS SUB-CLAUSE, 'SALARY' INCLUDES THE PAY, ALLOWANCES, BONUS OR COMMISSION PAYABLE MONTHLY OR OTHERWISE OR ANY MONETARY PAYMENT, BY WHATEVER NAME CALLED, FROM ONE OR MORE EMPLOYERS, AS THE CASE MAY BE, BUT DOES NOT INCLUDE THE FOLLOWING , NAMELY: (A) DEARNESS ALLOWANCE OR DEARNESS PAY UNLESS IT EN TERS INTO THE COMPUTATION OF SUPERANNUATION OR RETIREMENT BENEFITS OF THE EMP LOYEE CONCERNED; (B) EMPLOYER'S CONTRIBUTION TO THE PROVIDENT FUND A CCOUNT OF THE EMPLOYEE; (C) ALLOWANCES WHICH ARE EXEMPTED FROM THE PAYMENT OF TAX; ITA NO. 140/BANG/2018 PAGE 8 OF 11 (D) VALUE OF THE PERQUISITES SPECIFIED IN THIS CLAU SE; (E) ANY PAYMENT OR EXPENDITURE SPECIFICALLY EXCLUDE D UNDER THE PROVISO TO THIS CLAUSE. EXPLANATION 4.FOR THE PURPOSES OF THIS SUB-CLAUSE, 'SPECIFIED RATE' SHALL BE (I) FIFTEEN PER CENT OF SALARY IN CITIES HAVING POP ULATION EXCEEDING TWENTY-FIVE LAKHS AS PER 2001 CENSUS; (II) TEN PER CENT OF SALARY IN CITIES HAVING POPULA TION EXCEEDING TEN LAKHS BUT NOT EXCEEDING TWENTY-FIVE LAKHS AS PER 2001 CENSUS; AND (III) SEVEN AND ONE-HALF PER CENT OF SALARY IN ANY OTHER PLACE; (III) THE VALUE OF ANY BENEFIT OR AMENITY GRANTED O R PROVIDED FREE OF COST OR AT CONCESSIONAL RATE IN ANY OF THE FOLLOWING CASES (A) BY A COMPANY TO AN EMPLOYEE WHO IS A DIRECTOR T HEREOF; (B) BY A COMPANY TO AN EMPLOYEE BEING A PERSON WHO HAS A SUBSTANTIAL INTEREST IN THE COMPANY; (C) BY ANY EMPLOYER (INCLUDING A COMPANY) TO AN EMP LOYEE TO WHOM THE PROVISIONS OF PARAGRAPHS (A) AND (B) OF THIS SUB-CL AUSE DO NOT APPLY AND WHOSE INCOME UNDER THE HEAD 'SALARIES' (WHETHER DUE FROM, OR PAID OR ALLOWED BY, ONE OR MORE EMPLOYERS), EXCLUSI VE OF THE VALUE OF ALL BENEFITS OR AMENITIES NOT PROVIDED FOR BY WAY O F MONETARY PAYMENT, EXCEEDS FIFTY THOUSAND RUPEES: EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT THE USE OF ANY VEHICLE PROVIDED BY A COMPANY OR AN EMPLOYER FO R JOURNEY BY THE ASSESSEE FROM HIS RESIDENCE TO HIS OFFICE OR OTHER PLACE OF WORK, OR FROM SUCH OFFICE OR PLACE TO HIS RESIDENCE, SHALL NOT BE REGARDED AS A BENEFIT OR AMENITY GRANTED OR PROVIDED TO HIM FREE OF COST OR AT CONCESSIONAL RAT E FOR THE PURPOSES OF THIS SUB- CLAUSE; (IIIA) [***] (IV) ANY SUM PAID BY THE EMPLOYER IN RESPECT OF ANY OBLIGATION WHICH, BUT FOR SUCH PAYMENT, WOULD HAVE BEEN PAYABLE BY THE ASSESSEE; (V) ANY SUM PAYABLE BY THE EMPLOYER, WHETHER DIRECT LY OR THROUGH A FUND, OTHER THAN A RECOGNISED PROVIDENT FUND OR AN APPROVED SUPERANN UATION FUND OR A DEPOSIT- LINKED INSURANCE FUND ESTABLISHED UNDER SECTION 3G OF THE COAL MINES PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT, 19 48 (46 OF 1948), OR, AS THE CASE MAY BE, SECTION 6C OF THE EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 (19 OF 1952), TO EFFECT AN ASS URANCE ON THE LIFE OF THE ASSESSEE OR TO EFFECT A CONTRACT FOR AN ANNUITY; (VI) THE VALUE OF ANY SPECIFIED SECURITY OR SWEAT E QUITY SHARES ALLOTTED OR TRANSFERRED, DIRECTLY OR INDIRECTLY, BY THE EMPLOYER, OR FORMER EMPLOYER, FREE OF COST OR AT CONCESSIONAL RATE TO THE ASSESSEE. EXPLANATION.FOR THE PURPOSES OF THIS SUB-CLAUSE, (A) 'SPECIFIED SECURITY' MEANS THE SECURITIES AS DE FINED IN CLAUSE (H) OF SECTION 2 OF THE SECURITIES CONTRACTS (REGULATION) ACT, 195 6 (42 OF 1956) AND, WHERE EMPLOYEES' STOCK OPTION HAS BEEN GRANTED UNDE R ANY PLAN OR SCHEME THEREFOR, INCLUDES THE SECURITIES OFFERED UNDER SUC H PLAN OR SCHEME; (B) 'SWEAT EQUITY SHARES' MEANS EQUITY SHARES ISSUE D BY A COMPANY TO ITS EMPLOYEES OR DIRECTORS AT A DISCOUNT OR FOR CONSIDE RATION OTHER THAN CASH FOR PROVIDING KNOW-HOW OR MAKING AVAILABLE RIGHTS I N THE NATURE OF INTELLECTUAL PROPERTY RIGHTS OR VALUE ADDITIONS, BY WHATEVER NAME CALLED; ITA NO. 140/BANG/2018 PAGE 9 OF 11 (C) THE VALUE OF ANY SPECIFIED SECURITY OR SWEAT EQ UITY SHARES SHALL BE THE FAIR MARKET VALUE OF THE SPECIFIED SECURITY OR SWEAT EQU ITY SHARES, AS THE CASE MAY BE, ON THE DATE ON WHICH THE OPTION IS EXERCISE D BY THE ASSESSEE AS REDUCED BY THE AMOUNT ACTUALLY PAID BY, OR RECOVERE D FROM, THE ASSESSEE IN RESPECT OF SUCH SECURITY OR SHARES; (D) 'FAIR MARKET VALUE' MEANS THE VALUE DETERMINED IN ACCORDANCE WITH THE METHOD AS MAY BE PRESCRIBED; (E) 'OPTION' MEANS A RIGHT BUT NOT AN OBLIGATION GR ANTED TO AN EMPLOYEE TO APPLY FOR THE SPECIFIED SECURITY OR SWEAT EQUITY SH ARES AT A PREDETERMINED PRICE; (VII) THE AMOUNT OF ANY CONTRIBUTION TO AN APPROVED SUPERANNUATION FUND BY THE EMPLOYER IN RESPECT OF THE ASSESSEE, TO THE EXTENT IT EXCEEDS 19 [ONE LAKH AND FIFTY THOUSAND RUPEES]; AND (VIII) THE VALUE OF ANY OTHER FRINGE BENEFIT OR AME NITY AS MAY BE PRESCRIBED 20 :] PROVIDED THAT NOTHING IN THIS CLAUSE SHALL APPLY TO, (I) THE VALUE OF ANY MEDICAL TREATMENT PROVIDED TO AN EMPLOYEE OR ANY MEMBER OF HIS FAMILY IN ANY HOSPITAL MAINTAINED BY THE EMP LOYER; (II) ANY SUM PAID BY THE EMPLOYER IN RESPECT OF ANY EXPENDITURE ACTUALLY INCURRED BY THE EMPLOYEE ON HIS MEDICAL TREATMENT O R TREATMENT OF ANY MEMBER OF HIS FAMILY (A) IN ANY HOSPITAL MAINTAINED BY THE GOVERNMENT OR ANY LOCAL AUTHORITY OR ANY OTHER HOSPITAL APPROVED BY THE GOVERNMENT FO R THE PURPOSES OF MEDICAL TREATMENT OF ITS EMPLOYEES; (B) IN RESPECT OF THE PRESCRIBED DISEASES 21 OR AILMENTS, IN ANY HOSPITAL APPROVED BY THE PRINCIPAL CHIEF COMMISSIONER OR CHI EF COMMISSIONER HAVING REGARD TO THE PRESCRIBED GUIDEL INES 22 : PROVIDED THAT, IN A CASE FALLING IN SUB-CLAUSE (B), THE EMP LOYEE SHALL ATTACH 23 WITH HIS RETURN OF INCOME A CERTIFICATE FROM THE H OSPITAL SPECIFYING THE DISEASE OR AILMENT FOR WHICH MEDICAL TREATMENT WAS REQUIRED AND THE RECEIPT FOR THE AMOUNT PAID TO THE HOSPITAL; (III) ANY PORTION OF THE PREMIUM PAID BY AN EMPLOYE R IN RELATION TO AN EMPLOYEE, TO EFFECT OR TO KEEP IN FORCE AN INSURANC E ON THE HEALTH OF SUCH EMPLOYEE UNDER ANY SCHEME APPROVED BY THE CENTRAL G OVERNMENT OR THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ESTA BLISHED UNDER SUB- SECTION (1) OF SECTION 3 OF THE INSURANCE REGULATOR Y AND DEVELOPMENT AUTHORITY ACT, 1999 (41 OF 1999), FOR THE PURPOSES OF CLAUSE (IB) OF SUB- SECTION (1) OF SECTION 36; (IV) ANY SUM PAID BY THE EMPLOYER IN RESPECT OF ANY PREMIUM PAID BY THE EMPLOYEE TO EFFECT OR TO KEEP IN FORCE AN INSURANCE ON HIS HEALTH OR THE HEALTH OF ANY MEMBER OF HIS FAMILY UNDER ANY SCHEME APPROVED BY THE CENTRAL GOVERNMENT OR THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ESTABLISHED UNDER SUB-SECTION (1) OF SECT ION 3 OF THE INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ACT, 1999 (41 OF 1999), FOR THE PURPOSES OF SECTION 80D; 24 [ (V) ANY SUM PAID BY THE EMPLOYER IN RESPECT OF ANY EXPENDITURE ACTUALLY INCURRED BY THE EMPLOYEE ON HIS MEDICAL TREATMENT O R TREATMENT OF ANY MEMBER OF HIS FAMILY [OTHER THAN THE TREATMENT REFE RRED TO IN CLAUSES (I) AND (II)]; SO, HOWEVER, THAT SUCH SUM DOES NOT EXCE ED FIFTEEN THOUSAND RUPEES IN THE PREVIOUS YEAR; ] ITA NO. 140/BANG/2018 PAGE 10 OF 11 (VI) ANY EXPENDITURE INCURRED BY THE EMPLOYER ON (1) MEDICAL TREATMENT OF THE EMPLOYEE, OR ANY MEMBE R OF THE FAMILY OF SUCH EMPLOYEE, OUTSIDE INDIA; (2) TRAVEL AND STAY ABROAD OF THE EMPLOYEE OR ANY M EMBER OF THE FAMILY OF SUCH EMPLOYEE FOR MEDICAL TREATMENT; (3) TRAVEL AND STAY ABROAD OF ONE ATTENDANT WHO ACC OMPANIES THE PATIENT IN CONNECTION WITH SUCH TREATMENT, SUBJECT TO THE CONDITION THAT (A) THE EXPENDITURE ON MEDICAL TREATMENT AND STAY A BROAD SHALL BE EXCLUDED FROM PERQUISITE ONLY TO THE EXTENT PERMITT ED BY THE RESERVE BANK OF INDIA; AND (B) THE EXPENDITURE ON TRAVEL SHALL BE EXCLUDED FRO M PERQUISITE ONLY IN THE CASE OF AN EMPLOYEE WHOSE GROSS TOTAL INCOME , AS COMPUTED BEFORE INCLUDING THEREIN THE SAID EXPENDIT URE, DOES NOT EXCEED TWO LAKH RUPEES; (VII) ANY SUM PAID BY THE EMPLOYER IN RESPECT OF AN Y EXPENDITURE ACTUALLY INCURRED BY THE EMPLOYEE FOR ANY OF THE PURPOSES SP ECIFIED IN CLAUSE (VI) SUBJECT TO THE CONDITIONS SPECIFIED IN OR UNDER THA T CLAUSE : PROVIDED FURTHER THAT FOR THE ASSESSMENT YEAR BEGINNING ON THE 1ST D AY OF APRIL, 2002, NOTHING CONTAINED IN THIS CLAUSE SHALL APPLY TO ANY EMPLOYEE WHOSE INCOME UNDER THE HEAD 'SALARIES' (WHETHER DUE FROM, OR PAID OR ALLOWED BY, ONE OR MORE EMPLOYERS) EXCLUSIVE OF THE VALUE OF ALL PE RQUISITES NOT PROVIDED FOR BY WAY OF MONETARY PAYMENT, DOES NOT EXCEED ONE LAKH R UPEES. EXPLANATION.FOR THE PURPOSES OF CLAUSE (2), (I) 'HOSPITAL' INCLUDES A DISPENSARY OR A CLINIC OR A NURSING HOME; (II) 'FAMILY', IN RELATION TO AN INDIVIDUAL, SHALL HAVE THE SAME MEANING AS IN CLAUSE (5) OF SECTION 10; AND (III) 'GROSS TOTAL INCOME' SHALL HAVE THE SAME MEAN ING AS IN CLAUSE (5) OF SECTION 80B; 10. FROM THE ABOVE PROVISIONS, IT IS SEEN THAT FROM THE RENT PAID BY THE EMPLOYER, ANY RENT RECOVERABLE FROM THE EMPLOYEE HAS TO BE RE DUCED TO COMPUTE THE PERQUISITE VALUE OF RENT FREE ACCOMMODATION PROVIDE D BY THE EMPLOYER TO THE ASSESSEE EMPLOYEE. THE CLAIM OF THE ASSESSEE IS TH IS THAT HRA FOREGONE BY THE ASSESSEE IS THE AMOUNT OF RENT RECOVERED BY THE EMPLOYER FROM THE ASSESSEE BUT THERE IS FALLACY IN THIS ARGUMENT BECA USE EVEN IF IT IS CONSIDERED THAT HRA FOREGONE BY THE ASSESSEE IS RENT RECOVERED BY THE EMPLOYER FROM THE ASSESSEE THEN ALSO, SUCH HRA WHICH SHOULD HAVE BEEN RECEIVED BY ASSESSEE AND FOREGONE BY THE ASSESSEE BY OPTING FOR RENT FRE E ACCOMMODATION HAS TO BE OFFERED FOR TAX AS AN INCOME THEN AFTER THAT ONLY, IT CAN BE SAID THAT ANY RENT IS RECOVERED BY THE EMPLOYER FROM THE ASSESSEE IN THE FORM OF FOREGOING OF HRA. SO IN EFFECT, NO DEDUCTION IS ALLOWABLE ON THAT ACC OUNT BECAUSE HRA IS TAXABLE ITA NO. 140/BANG/2018 PAGE 11 OF 11 AND IT WILL BE EXEMPT ONLY IF THE RENT PAID BY THE ASSESSEE EXCEEDS 10% OF SALARY AS PER SECTION 10 (13A) OF IT ACT. IN THE P RESENT CASE, THE ASSESSEE IS NOT PAYING ANY RENT AND THEREFORE, NO EXEMPTION IS AVAILABLE TO THE ASSESSEE U/S. 10(13A) AND THE ENTIRE HRA IS TAXABLE AND THER EFORE, THE ASSESSEE CANNOT GET ANY BENEFIT ON THIS ACCOUNT. NOW IN THE LIGHT OF THESE FACTUAL AND LEGAL POSITION, WE EXAMINE THE APPLICABILITY OF TRIBUNAL ORDER ON WHICH RELIANCE IS PLACED BY LD. AR OF ASSESSEE. FROM THIS TRIBUNAL O RDER, THIS IS NOT COMING OUT AS TO WHETHER THE ASSESSEE WAS ENTITLED TO EXEMPTIO N OF HRA U/S. 10(13A) OF IT ACT OR NOT AND THEREFORE, THIS TRIBUNAL ORDER IS NO T RELEVANT IN THE PRESENT CASE. IN THE PRESENT CASE, THIS IS CLEAR THAT THE ASSESSE E IS NOT PAYING ANY RENT AND THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR ANY EXE MPTION U/S. 10(13A) AND THEREFORE, EVEN IF SUCH HRA IS REDUCED FROM THE PER QUISITES VALUE OF RENT FREE ACCOMMODATION, SUCH HRA HAS TO BE BROUGHT TO TAX AN D IN THE RESULT, TOTAL INCOME IS NOT REDUCED. THEREFORE, THIS ISSUE IS AL SO DECIDED AGAINST THE ASSESSEE BECAUSE WE FIND NO REASON TO INTERFERE IN THE ORDER OF CIT (A). 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (SUNIL KUMAR YADAV) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 31 ST AUGUST, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.