1985 (3) TMI 32 - HC - Income Tax

Summary

Issues Involved:
1. Taxability of amounts payable by Hindustan Shipyard Limited as tax perquisites.
2. Exemption of allowances received by the assessee u/s 10(14) of the Income-tax Act.
3. Entitlement to relief u/s 16(v) of the Income-tax Act.
4. Jurisdiction of the Income-tax Officer to rectify assessment orders u/s 154 of the Income-tax Act.

Summary:

Issue 1: Taxability of Amounts Payable by Hindustan Shipyard Limited as Tax Perquisites
The court examined whether the amounts paid by Hindustan Shipyard Limited under the agreement with the Polish firm are tax perquisites in the hands of the assessee and liable to be taxed as "income from other sources." The court held that the income received by the assessee from Hindustan Shipyard Limited towards the payment of taxes is indeed income from other sources falling u/s 56 of the Income-tax Act. The court concluded that these amounts are liable to be taxed as income from other sources in the hands of the assessee during the relevant assessment years.

Issue 2: Exemption of Allowances Received by the Assessee u/s 10(14) of the Income-tax Act
The court addressed whether the allowances received by the assessee from his Polish employer qualify for exemption u/s 10(14) of the Income-tax Act. It was held that the nature of the allowances did not qualify them as "special allowances" specifically granted to meet expenses incurred in the performance of duties. Therefore, these allowances were part of the assessee's total income and liable to be taxed.

Issue 3: Entitlement to Relief u/s 16(v) of the Income-tax Act
The court noted that the assessee's counsel did not advance any arguments under this issue. Consequently, the court omitted this question from consideration.

Issue 4: Jurisdiction of the Income-tax Officer to Rectify Assessment Orders u/s 154 of the Income-tax Act
The court examined whether the Income-tax Officer had jurisdiction to rectify the original assessment orders. The rectification involved grossing up the income of the assessee, which was initially not done correctly. The court held that the Income-tax Officer had committed a self-evident error in the original assessment by not applying the correct method of grossing up. Therefore, the rectification u/s 154 was justified and within the jurisdiction of the Income-tax Officer.

Conclusion:
The court answered questions 1, 2, and 4 in favor of the Revenue and against the assessee. Question 3 was not addressed as it was not argued by the assessee. The referred cases were answered accordingly.