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August 2026

House Rent Allowance — Section 10(13A) — Rent paid by employer to the landlord — Recovered from employee’s salary — House Rent Allowance denied by the AO on the ground that the employee did not pay rent and was living in the accommodation provided by the employer — Mode of payment of rent does not change the character of the payment — Incurring of the rent has to be seen — Not the mode of payment to the landlord — Disallowance was not sustainable.

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 5 mins

23. Kuldeepkumar D. Kaura v. DCIT

2026 (6) TMI 1458 (Guj.)

A. Y. 2006-07: Date of order 22/06/2026

S. 10(13A) of ITA 1961

House Rent Allowance — Section 10(13A) — Rent paid by employer to the landlord — Recovered from employee’s salary — House Rent Allowance denied by the AO on the ground that the employee did not pay rent and was living in the accommodation provided by the employer — Mode of payment of rent does not change the character of the payment — Incurring of the rent has to be seen — Not the mode of payment to the landlord — Disallowance was not sustainable.

The assessee is an individual and the CEO and COO of one Sterlite Industries India Ltd. The assessee’s return of income was selected for scrutiny on the ground that the assessee had one house property in Delhi which was claimed as self-occupied and therefore exempt. However, the assessee was in Mumbai in a leased premises of the company where the assessee was employed as the CEO.

The assessee claimed exemption of House Rent Allowance (HRA) under Section 10(13A) of the Income-tax Act, 1961, in respect of the leased premises. It was submitted that being the emplo

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