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TMI Blog2005 (12) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... ees of the company be included in the assessee's income?" Whereas in Income-tax Reference No. 104 of 1995, the Income-tax Appellate Tribunal, Meerut, has referred the following question for the assessment year 1988-89: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in confirming the order of the lower appellate authority by allowing scholarship to the assessee's son as exempt?" The facts of both the above references are identical and the Tribunal while deciding the appeal in the case of Shri Y.K. Seth, giving rise to the Reference No. 104 of 1995, has followed its earlier order passed in the case of Shri B.L. Garg giving rise to Reference No. 25 of 1997. Both the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lp of section 17(2)(iii)(c) of the Act that the amount given by a company to the assessee's son as scholarship is a perquisite and liable to be taxed under the head "Salary" under section 17 of the Act. It was submitted that by giving scholarship to the son of the assessee the company in a way reimbursed the amount of expenses which would have been incurred by the assessee. The assessee has, thus, been the ultimate beneficiary and has been benefited by the employer company. It was further submitted that the scholarship was given to the assessee's son without there being any such scheme and at least no such scheme has been placed on the record. The grant of scholarship to the assessee's son was in the nature of device adopted by the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following meaning to 11 the word scholarship: "Scholarship- Financial help for a student, 1. a sum of money awarded to a student on the basis of academic merit, to help with living expenses, study or travel, 2. formal study, academic learning or achievement, 3. academic works, a body of learning or an academic subject." Section 10 sets down various items of income which are outside the purview of total taxable income. Section 10 of the Act is in Chapter III of the Act, the heading whereof is "Incomes which do not form part of total income". The heading of section 10 is quite clear and does not admit any ambiguity. The heading of section 10 itself is suggestive of the fact that certain receipts which are income are not included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his court that the payment of scholarship was nothing but a perquisite to the assessee and as such it is liable to be included in the hands of the assessee under section 17 of the Act. The said argument is misconceived and liable to be rejected for reasons more than one. No question whether the payment of scholarship to an employee's son by a company is a perquisite or not, has been referred by the Tribunal for the opinion of this court, as rightly pointed out by learned counsel for the assessee. To this, learned counsel for the Department has submitted that the scholarship amount is liable to be included in the hands of the assessee under section 17(2)(iii)(c) of the Act. He submitted that the scholarship was paid without there being any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 184 ITR 533. In this case, the Tribunal found that the payment was received by the assessee as wages. Part of the amount represented overtime charges and taxes were deducted by the authority concerned. The assessee joined the medical school in the University of Massechussets. To fulfil the requirements of the "American Board of Internal Medicine", the assessee did internship at a hospital and received a certain amount which was claimed by him as scholarship amount. The Tribunal recorded a finding that the amount represented wages, etc. In this fact situation, the High Court held that the payments, thus, received by the assessee were towards the pay or salary and was not scholarship. In this case the case of CIT v. V.K. Balachandran [1984] 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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