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TMI Blog2011 (11) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... any in which either the assessee or his/her spouse was a Director, is a perquisite and an income of the assessee in terms of Section 2(24)(iv) of the Income Tax Act, 1961 (for short 'the Act'). The appeals are: Sr.No. Appeal No. Assessee Assessment Year 1. ITA No.95 of 2000 Madhu Gupta 1994-95 2. ITA No.96 of 2000 Madhu Gupta 1992-93 3. ITA No.97 of 2000 Rajinder Gupta 1990-91 4. ITA No.98 of 2000 Madhu Gupta 1995-96 5. ITA No.99 of 2000 Rajinder Gupta 1994-95 6. ITA No.100 of 2000 Rajinder Gupta 1991-92 7. ITA No.101 of 2000 Rajinder Gupta 1993-94 8. ITA No.104 of 2000 Madhu Gupta 1993-94 9. ITA No.28 of 2001 Nohar Chand Gupta 1994-95 All the appeals are taken up together, as the questions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance was placed on a judgment of Calcutta High Court reported as CIT Vs. P.R.S. Oberoi 183 ITR 103. Learned counsel for the assessee has argued that the revenue has not filed any further appeal against the order passed in Varinder Gupta's case (supra) relied upon by the Tribunal, therefore, the revenue cannot be permitted to dispute the findings recorded by the Tribunal. The learned Counsel for the revenue submitted that as the tax effect was not substantial in the said case, therefore, appeal was not filed. Be as it may, we have examined the question raised. Before considering the arguments raised by the learned counsel for the parties, the provisions of law as it existed, relevant for the Assessment Years in question reads as unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt, if not impossible, to borrow amounts for one's own use without having any liability to pay interest. Putting it positively, ordinarily borrowing can be had only by incurring an obligation to pay interest. What would be the amount of interest will be, unless there are statutory provisions governing the matter, a matter of agreement between the lender the borrower. But if either due to magnanimity or with a view to help an employee any amounts are advanced by an employer to an employee without an obligation to pay any interest, we have no hesitation in that he gets the use of the monies belonging to the company or any other employer without having any liability to pay interest...." Such view was reiterated by the Madras High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r perquisite" within the meaning of section 2(24) (iv) of the Incometax Act, 1961. The intention of the Legislature seems to be very clear that the expressions 'benefit" and/or "perquisite" did not include the enjoyment of loan or credit, free of interest or at a concessional rate. This aspect has been recognized by the statute itself and to bring such items in the net of taxation, the law was amended by the Taxation Laws (Amendment) Act, 1984. By this amendment, as already indicated, a new sub-clause (vi) was inserted in Section 17 (2) and similarly another sub-clause (vi) was I was inserted in clause (b) of Explanation 2 to Section 40A(5). The effect of these amendments, which were made effective from April 1, 1985 was to ensure treatment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) to section 40A (5) or section 17(2)(iii) of the Act, by the same yardstick, such loan cannot also be construed as benefit or a perquisite for the purposes of Section 2(24)(iv) of the Act. In that view of the matter, we have no hesitation in holding that section 2(24)(iv) cannot be pressed into service or on the facts and in the circumstances of this case." Learned counsel for the assessee pointed out that the judgments of Calcutta High Court as also of Madras High Court referred to by the counsel for the Revenue have been considered by the Hon'ble Supreme Court in V.M.Salgaocar and Bros Pvt. Ltd. Vs. Commissioner of Income Tax 243 ITR 383. The Hon'ble Supreme Court has approved the view of Calcutta High Court and also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period prior to the 1984 amendment and the Madras High Court had no occasion to consider the impact of the amendments to section 17(2) and section 40A(5) of the Act. xxx xxx xxx The High Court in the impugned judgment could not have brushed aside the consideration of the Amending Act, 1984 and its subsequent repeal by the Finance Act 1985, by terming them of no consequence....." At this stage, we may notice that Section 17 falling in Chapter IV deals Computation of Income under the head 'salary'. Section 17(2) defines 'perquisite' for the purposes of Sections 15 & 16 and for the purposes of Section 17, whereas Section 40A contemplates that the computation of income under the head "Profits and gains of business or profess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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