9911796707
TMI Blog1998 (2) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... rican Madura Mission of the United Church Board for World Ministries and who had served at the Christian Medical College Hospital at Vellore had been granted tax-free income by her employers. The assessee was a national of the United States and a nurse by profession. She had filed returns for the years 1974-78 showing the income of Rs. 34,653 for the assessment year 1974-75, Rs. 40,508 for the assessment year 1975-76, Rs. 67,741 for the assessment year 1976-77 and Rs. 48,035 for the assessment year 1977-78. At the time of filing the return, the amount of tax payable on the income aforementioned is, viz., Rs. 9,574, Rs. 12,082, Rs. 17,450 and Rs. 19,883, were shown as income-tax allowance. There was no written contract between her and the ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id to an employee does not by itself determine or necessarily lead one to the conclusion that the salary paid was a tax-free salary. The assessee herein had been paid the salary and in addition to that, an allowance was given termed as "income-tax allowance". The assessee was not given the right to claim any further amount from the employer on account of having to pay amounts as tax in excess of the amount of the allowance. The allowance was given towards payment of income-tax. The allowance so given therefore, did not result in her salary becoming a tax-free salary. The assessee had offered that amount of allowance also to tax and her total salary was therefore required to be regarded as the salary as reported by her plus the amount of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployee would be entitled to reimbursement of such liability, the salary along with the allowance towards income-tax could not be regarded as tax-free. The question in every case is a question of fact and as to what the employer intended in offering the allowance or indicating a willingness to pay any amount towards income-tax liability of the assessee. On the facts of this case, it is clear that the employer had only agreed to pay an allowance which was a sum calculated on the salary agreed to be given and which sum had been rightly included by the assessee as part of the assessee's income. On the materials before the Tribunal, it could not be said that the employer had agreed to pay tax-free salary as the employer bid not agreed to pay an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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