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TMI Blog1982 (7) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt of a pension from the Government which has been assessed at Rs. 3,330. In addition to the salary received by him from the Gymkhana Club, the applicant and his wife were also provided by the club with free meals. The ITO, following the decision of the Income-tax Appellate Tribunal in the case of the assessee for the assessment year 1965-66, did not take into account in the assessment the value of the above amenity thus provided by the club free of cost to the assessee and his wife. This order of the ITO was revised by the Commissioner under s. 263 of the I.T. Act, 1961. In response to the notice under s. 263 it was contended on behalf of the assessee before the Commissioner that the value of the free food was not taxable as a perquisite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the above salary should be only from the same employer who had granted the perquisite. In principle also the Tribunal saw no reason to hold differently. It, therefore, upheld the order of the Commissioner and dismissed the appeal of the assessee. At the request of the assessee the following question has been referred to us for decision : " Whether, on a correct interpretation of the provisions contained in section 17(2)(iii)(c) of the Income-tax Act the Tribunal was right in holding that the limit of Rs. 18,000 mentioned in the said section refers to the income from salaries from all employers and former employers put together and not the income under the head 'Salaries' received from the employer which granted the perquisite? " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of all benefits or amenities not provided for by way of monetary payment, exceeds eighteen thousand rupees; (iv) any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee and (v) any sum payable by the employer, whether directly or through a fund, other than a recognised provident fund or an approved superannuation fund to effect an assurance on the life of the assessee or to effect a contract for an annuity." From the definition of " perquisite " set out above it will be seen that the amenities or benefits covered by sub-cl. (i), sub-cl. (ii), sub-cl. (iv) and sub-cl. (v) are taxable as perquisites in the hands of all employees when such amenities are pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y payments should not be taxed except, (a) in the case of employees who are closely related to a company-employer which provides them with such benefit, or (b) where the employee is not a low paid employee. The standard provided by the section to determine the latter category of employees in whose case sub-cl. (iii) will be attracted is that the income of such employee under the bead " Salaries " should be above Rs. 18,000. There is nothing in the language of this provision to show or to indicate that in determining the category of this employee, only the income by way of salaries received by him from the employer who provides the amenity should be taken into account. The language of the sub-clause clearly states that what is to be determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of salaries and that the salary income that may be received by the employee from other sources of employment need not be and should not be taken into account. We have already pointed out that there is no scope for restricting the interpretation of s. 17(2)(iii)(c) in the manner suggested by the learned counsel. The object of the section is to bring to tax the value of such amenities or benefits in the case of employees who have certain amount of income; that standard is set out in very wide language which there is no reason to restrict. That apart, we may point out that the interpretation sought to be placed by the learned counsel can also lend itself to abuse and manipulation. For the reasons discussed above we agree with the view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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