1982 (7) TMI 80 - HC - Income Tax

Summary

Issues Involved:
1. Determination of the assessee's residential status for the assessment year 1965-66.
2. Entitlement to exemption under section 10(4A) of the Income-tax Act, 1961.
3. Taxability of Rs. 1,500 under section 2(24)(iv) of the Income-tax Act, 1961.

Detailed Analysis:

1. Determination of the Assessee's Residential Status:
The primary issue was whether the assessee was a "resident" but "not ordinarily resident" during the assessment year 1965-66. The assessee, a South African national, stayed in India for more than 30 days during the relevant previous year but claimed non-resident status. The Income Tax Officer (ITO) and the Appellate Assistant Commissioner (AAC) held that the assessee was a resident but not ordinarily resident under section 6(1)(b) of the Income-tax Act, 1961, as he maintained a dwelling place in India for more than 182 days. However, the High Court, after reviewing the facts and relevant case law, including CIT v. Fulabhai Khodabhai Patel and Pickles v. Foulsham, concluded that the flat provided by M/s. Arvind Industries Pvt. Ltd. could not be considered the assessee's dwelling place. The court noted the absence of evidence showing that the assessee regarded the flat as his home or intended to return to it. Consequently, the court answered Question No. 1 in the negative, determining that the assessee was not a resident during the relevant year.

2. Entitlement to Exemption under Section 10(4A):
This issue was directly linked to the first issue. Since the court concluded that the assessee was not a resident, he was entitled to the exemption under section 10(4A) of the Income-tax Act, 1961. Therefore, Question No. 2 was answered in the affirmative, in favor of the assessee.

3. Taxability of Rs. 1,500 under Section 2(24)(iv):
The third issue concerned the inclusion of Rs. 1,500 in the assessee's total income under section 2(24)(iv) of the Income-tax Act, 1961, on account of the benefit derived from staying in the flat free of cost. Both parties agreed that this issue was covered by the decision in CIT v. Shri Ramnath A. Podar, which held that such benefits could not be taxed. Consequently, Question No. 3 was answered in the negative, in favor of the assessee.

Conclusion:
The High Court concluded that all questions were answered in favor of the assessee:
- Question No. 1: In the negative.
- Question No. 2: In the affirmative.
- Question No. 3: In the negative.

The Commissioner was directed to pay the costs of the reference to the assessee.