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Issues:
1. Taxability of food expenses borne by the employer as perquisites in the hands of the assessee. 2. Determination of the value of perquisites for food provided to the assessee in a hotel. 3. Applicability of tax on non-convertible facilities or benefits provided by the employer. 4. Interpretation of the term "perquisite" under the Income-tax Act, 1961. Analysis: Issue 1: The primary issue in this appeal is the taxability of food expenses borne by the employer, Banque Indosuez, as perquisites in the hands of the assessee. The Income Tax Officer (ITO) brought the food charges of Rs. 62,208 to tax as perquisites assessable to the assessee. The CIT(A) reduced the addition to Rs. 13,000, considering the value of perquisites @ Rs. 2,000 per month for a specific period. The revenue contended that the entire amount of expenditure should be treated as perquisites, relying on a Tribunal decision. The assessee argued that there was no employer-employee relationship vis-a-vis the Indian branch until a certain date. The Tribunal rejected the assessee's contention, emphasizing that the employer-employee relationship remained throughout the year, making the food expenses taxable perquisites. Issue 2: The second issue revolves around the determination of the value of perquisites for food provided to the assessee in a hotel. The revenue argued that the entire amount of food expenses should be considered as perquisites, while the assessee contended that the value should be limited. The Tribunal held that the entire amount of Rs. 62,208 was taxable in the hands of the assessee, rejecting the CIT(A)'s reduction and restoring the ITO's order. Issue 3: Another contention raised was whether the facility of food provided to the assessee could be assessed to tax as it was not convertible into money or moneys worth. The assessee relied on UK and Indian cases where the concept of non-convertibility was considered. However, the Tribunal held that under the Income-tax Act, 1961, the value of facilities provided to an employee, including food expenses borne by the employer, constitutes a perquisite and is taxable. Issue 4: The interpretation of the term "perquisite" under the Income-tax Act, 1961 was crucial in this case. The Tribunal clarified that the concept of a facility or benefit being convertible into money or moneys worth does not apply under the Act. The value of benefits provided by the employer, such as food expenses, is considered part of the salary and taxable. The Tribunal rejected the assessee's argument that only the second-hand price of the food provided should be assessed, emphasizing that the entire amount borne by the employer is taxable. In conclusion, the Tribunal allowed the revenue's appeal, holding that the food expenses borne by the employer were taxable perquisites in the hands of the assessee. The decision was based on the continuous employer-employee relationship and the provisions of the Income-tax Act, 1961 regarding the taxation of benefits and facilities provided by the employer.
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