9911796707
TMI Blog1981 (5) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1967-68 ? " The assessee, Mr. R. S. Garg, an individual, formerly worked for the World Health Organization. He retired on 1st May, 1964. During the year in question, which is the assessment year 1967-68, the corresponding previous year being the year ending 31st March, 1967, the assessee received an amount of Rs. 12,928 as pension from the United Nations joint Staff Pension Fund; in addition to this amount, his children derived a benefit valued at Rs. 13,500 from the same fund. He claimed that these amounts were exempt, as his salary and emoluments as an official of the WHO had been exempt from taxation. However, the ITO included the amount of Rs. 12,928 and Rs. 13,500 in the assessee's total income. With regard to the latter amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. had been contributed by his employer, the WHO. It was only this contribution of 21 per cent. which had been pooled into the United Nations joint Staff Pension Fund that was being returned to the assessee in the shape of retirement benefits. The AAC, therefore, directed the ITO to deduct 1/3rd of Rs. 12,928 and Rs. 13,500 as consisting of the contribution by the assessee and reduce the total income by this amount. The revenue appealed to the Tribunal and the assessee filed a cross-objection. The Tribunal held that the pension could not be correlated to the contribution by the assessee to the United Nations joint Staff Pension Fund. Further, pension was includible as salary in the assessee's income by virtue of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly relates to that part of the children's benefits. Learned counsel for the revenue has urged that the Tribunal has erred in coming to the conclusion that the child's benefit was receivable by the child and was not a perquisite or profit in lieu of salary of the assessee. Learned counsel for the assessee, however, contended that the Tribunal's conclusion and reasoning were correct and alternatively the amount is exempt in view of s. 18(b) of the United Nations (Privileges and Immunities) Act, 1947 (1947 Act). The 1947 Act provides for the conferment of certain privileges and immunities to officers and representatives of the United Nations. Section 2 of the 1947 Act makes the provisions incorporated in the Schedule to the Act as law in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... participant who died, or, inter alia, became entitled to the retirement benefit under art. IV, was entitled to a child's benefit. This benefit was payable monthly till the child attained the age of eighteen and was extended till the age of twenty-one, if the child was in full time attendance at a school or university (art. VIII). Article VIII(1) of the Regulations of the United Nations joint Staff Pension Fund which were adopted by the General Assembly by Resolution. 248(III), effective 23rd January, 1949, and amended by subsequent resolutions, reads: " Subject to, paragraph 4 below, each unmarried child of a participant who dies or oil whose account a benefit becomes payable under articles IV, V or VII shall be entitled to a child's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its, must not exceed the final average remuneration plus the children's allowance which he was receiving at the date his service ceased." Article 1(3) defines pensionable remuneration as follows: " 'Pensionable remuneration' means the remuneration of a participant which is pensionable in accordance with his terms of employment. It shall not include any special grants or allowances, such as children's allowances, education grants, expense allowances, cost of living allowances, payments for overtime, fees, honoraria, and payments for any expenses incurred in the service of a member organization. If part or the whole of the pensionable remuneration is paid in kind, the value of such payments, if not stated in the terms of employment, sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neficiary is the child and not the participant. This is apparent as the payment continues, if the conditions are satisfied, irrespective of the life of the participant. In fact, if the participant's widow also dies or he does not have a wife at the time of his death then the child's benefit increases. A disabled child is entitled to the benefit while the disability continues. Therefore, the amount allowable as the child's benefit, though available only because of the filial link with the participant, is an amount recoverable by the child and not by the participant. It is, therefore, not the income of the participant. Further, since it does not appear to come within the provisions of s. 17, including s. 17(iv), in the absence of any statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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