9911796707
TMI Blog1998 (9) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... of the applicant has to be grossed up on 'tax on tax basis' and not on simple tax basis as envisaged under section 17(2) of the Income-tax Act, 1961 ?" The reference has been made at the instance of the assessee relating to the assessment year 1984-85. Shortly stated the facts are : The assessee in this case is a foreigner who worked as a technical advisor to Yuken India Ltd., Bangalore. As per the terms of his employment, he was to be paid a fixed amount of net salary and the tax component was to be borne by his employer. The employer paid income-tax of Rs. 34,306 on behalf of the assessee. The Income-tax Officer framed the assessment and determined the taxable income at Rs. 83,554. The Income-tax Officer made the calculations as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the correct income by taking into consideration the principle of grossing up the salary. The assessee filed an appeal before the Tribunal. The Tribunal, after taking into consideration the submissions of the parties and relying upon the decision of the Mysore High Court to which this court is the successor reported as Tokyo Shibaura Electric Co. Ltd. (by agents Radio and Electricals Mfg. Co. Ltd., Mysore) v. CIT [1964] 52 ITR 283, dismissed the appeal. The assessee thereafter filed an application under section 256(1) of the Act requesting the Tribunal to refer the questions of law arising from its order to this court for its opinion. Acceding to the request of the assessee, the Tribunal referred the question of law reproduced in the earli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, the taxable income was arrived at Rs. 83,554. It has been conceded before us that the amount of Rs. 34,306 constituted the perquisite received by the assessee. In that case, the perquisite of tax has to be added to the gross salary of the assessee and then calculate the tax subject to any deductions admissible in law. The Income-tax Officer failed to add the perquisite of the tax borne by the employer in the salary of the assessee like other perquisites before arriving at the taxable income of the assessee. The contention of counsel for the assessee that if the net taxable income is arrived at after adding the perquisite of the tax paid by the employer for the purpose of taxation then, it would amount to tax on tax is fallacious ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
