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TMI Blog1972 (2) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the aforesaid residential accommodation- Whether an employee is liable for Expenditure-tax in respect of the annual letting value of the house given for employees occupation free of rent - - - - - Dated:- 9-2-1972 - Judge(s) : S. N. DWIVEDI., R. L. GULATI. JUDGMENT The judgment of the court was delivered by R. L. GULATI J.- This is a reference under section 25(1) of the Expenditure-tax Act, 1957, at the instance of the Commissioner of Expenditure-tax, U.P. Lucknow. The reference arises out of assessments under the Expenditure-tax Act for the assessment years 1958-59 and 1959-60. The assessee, Laxmipat Singhania, was at the material time a financial adviser to a limited company known as the J. K. Jute Mills Co. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment of the assessee under section 4(i) of the Expenditure-tax Act ? " Section 3 is the charging section under which every individual or a Hindu undivided family has to pay tax in respect of the expenditure incurred in the previous year. The term " expenditure " has been defined in section 2(h) as follows : " Expenditure means any sum in money or money's worth, spent or disbursed or for the spending or disbursing of which a liability has been incurred by an assessee, and includes any amount which under the provisions of this Act is required to be included in the taxable expenditure." The definition is in two parts. The first part covers the expenditure directly incurred by the assessee. The second part covers any expenditure which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d provided to the assessee a rented accommodation and had undertaken to pay the rent thereof. But providing its own house for free residence cannot be said to be an expenditure by the company. As has been rightly observed by the Tribunal, expenditure on a capital asset is incurred when the capital asset is acquired or built. Thereafter the use of that asset does not entail any recurring expenditure. In the instant case what can be said at the most is that the company is forgoing the rent in respect of its house at Calcutta which it has provided to the assessee free of rent. But, forgoing rent does not amount to incurring expenditure. We are, therefore, of opinion that the Tribunal was right in holding that the sum of Rs. 19,440 being the an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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