1980 (6) TMI 81

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..... ts made by the ITO, Vellore for the asst. yrs. 1974-75 and 1975-76, under s. 143(3) of the IT Act, 1961. 2. The assessee is an U.S.A. National and a Nurse by profession. She received National Award for nursing in the year 1980. She was sent by the United Church Board for World Ministers for service in India. In fact, she was paid remuneration by the American Madurai Mission of the United Church .....

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..... up on the basis of tax as tax giving rise to disputed liability. The result was that the assessee's salary income came to be computed at Rs. 67,500 and Rs. 77,070 as against returned income at Rs. 44,227 and Rs. 40,506 respectively. As stated earlier, the returned income included the actual amount of income-tax reimbursed by the employer at Rs. 9,574 and Rs. 12,082 respectively. It is the assesse .....

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..... to review the case law on the point and came to the conclusion that there should be a finding that the employee was paid a tax free salary on that the remuneration should be agreed net amount, if grossing were to be done on the basis of tax on tax. If only a limited amount of tax was reimbursed by the employer, only such limited amount could be treated as perquisite and nothing more. The ld. Deptl .....

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..... say that the amount of Rs. 9,574 and Rs. 12,082 actually given to the lady as Income-tax Allowance was only a part or instalment. The certificate of payment as well as the return show only these amounts Rs. 9,574 and Rs. 12,082 offered for tax have e been given to her. Nothing more was given. At any rate, it has not been shown to us that she had any further right to any further amount. The Case La .....

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..... amount is done with a view to secure an agreed net income, such net income is to be grossed up on the basis of tax on tax. In this case, no such net income is secured. We have no doubt that any other view is impossible even in the light of all the case laws cited by both the parties. 5. In the result, the appeals will have to be allowed and are allowed. The perquisites for reimbursement of inco .....

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