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TMI Blog1989 (6) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... rawing a salary exceeding Rs. 18,000. During the relevant accounting period, the employer had provided a, motor car for use by the assessee in connection with the business of the employer. The assessee produced a certificate from the employer to the effect that the cars and vans belonging to the employer firm were used during the accounting period only for the purpose of the business of the firm and that the manager and other employees of the firm were not permitted to use the same for their personal purposes. The Income-tax Officer found that the assessee had been using the car for participating in public functions, marriage parties and for visiting clubs. Since he found that the assessee was using the car for personal purposes also, he re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he had used the conveyance for personal purposes also is not, in receipt of a perquisite failing under rule 3(c)(ii) and that no addition valuing the perquisite under the clause is, therefore, warranted ? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in deleting the addition of Rs. 3,600 and directing the Income-tax Officer to allow full deduction under section 16(i) ?" We heard counsel for the Revenue and also counsel for the respondent. The Tribunal found that the certificate issued by the employer is to the effect that the conveyance had been provided for the use of the employee for business purposes only and that the manager had not been permitted to use the car for his personal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is extracted hereunder: "16 The income chargeable under the head 'Salaries' shall be computed after making the following deductions, namely (i) in respect of expenditure incidental to the employment of the assessee, a sum calculated on the basis provided hereunder, namely: (a) where the salary derived from such 20 per cent. of such salary ; employment does not exceed Rs. 10,000. (b) where the salary derived from such Rs. 2,000 plus 10 per cent. of the employment exceeds Rs. 10,000. amount by which such salary exceeds Rs. 10,000. or Rs. 3,500 whichever is less: Provided that (i) where the assessee is in receipt of a conveyance allowance from his employer ; or (ii) where any motor car, motor cycle, scooter or other mope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the standard deduction to rupees one thousand. The next section is section 17 which is relied upon by the Revenue. For the purpose of charging "salary" under section 17(2), "perquisite" also will have to be included and it is the contention of the Revenue that the provision of a motor-car will be a perquisite chargeable under section 17(2)(iii)(c). For the purposes of sections 15, 16 and 17, the term "perquisite" will include the value of any benefit or amenity granted or provided free of cost or at a concessional rate by an employer to an employee whose income under the head "Salaries", exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds eighteen thousand rupees. How the quantum of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mad), in M. M. Metha v. CIT [1979] 117 ITR 362 (Cal) and in CIT v. G. Venkataraman [1978] 111 ITR 444 (Mad). The question whether unauthorised use of the car of the company by the assessee would not constitute a perquisite came up for consideration in CIT v. Late Jawaharlal Nagpal [1988] 171 ITR 136 and at page 140, their Lordships of the Madhya Pradesh High Court answered the question as under : "As regards question No. (2), the Tribunal, in our opinion, was right in holding that the unauthorised use of the car of the company by the assessee would not constitute a perquisite. The view of the Tribunal is supported by a decision of the Madras High Court in CIT v. A. R. Adaikappa Chettiar [1973] 91 ITR 90. We see no cogent reason to take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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