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TMI Blog1988 (7) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... and as a consequence the payment of tax on behalf of the assessee by the employer required to be added as a perquisite in the hand of the assessee. 3. In the reassessment proceedings subsequent to the order of the CIT under s.263, the first charge of violation which was laid against the assessee was that the remuneration paid to him exceeded the limit approved by the Government. According to the Departmental a salary of RS. 8,000 per month with annual increment of Rs. 500 had been bonus approved whereas the assessee had been paid bonus by the company over and above these figures. The second charge was that the contract of service had not been approved in time, viz. prior to 1st October of the relevant assessment year. It was on the aforesaid two grounds that the CIT set aside the assessment and it was on similar ground that the ITO recomputed the assessable income. The ITO brought to tax a further sum of Rs. 2,33,630 being the perquisite on account of the taxes paid by M/s Lakhanpal. The impugned addition was made by the ITO although it was explained to him during the course of the proceedings that there had been no violation as alleged. The first submission was that the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondence which took place between the Indian Company employing the assessee and the Government of India regarding the approval of salary and its extent. 7. As regards asst. yr. 1980-81, the CIT(A) specifically recorded that all conditions regarding the extent of salary and allowances as laid down by the section stood fulfilled and with in the meaning of the sanction accorded by the Government of India. He, however, found that there was a delay in obtaining the approval but the same was condoned following the decision of the Calcutta High Court in the case of CIT vs. Birla Brothers Pvt. Ltd. (1982) 26 CTR (Cal) 4. 8. In respect of asst. yr. 1981-82, the CIT(A) observed as follows: "7. For the asst. yr. 1981-82, there is no change in the factual position. The salary and allowance paid to the Foreign Technician were covered by the letter of approval issued by the Government of India and the subsequent clarifications obtained from them. As regards the date of approval, there was no delay. The approval was obtained on 4th Dec., 1980 as against the due date of 1st Oct., 1981. 8. In view of the aforesaid discussion, it is evident that the appellant fulfilled the required condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 500 P.M. but also subsequently clarified that it was not considered necessary to indicate the figures of allowances and perquisites. He invited our attention to page 38 of the paper book which was the cover of a letter dt. 4th Sept., 1977 addressed by the Ministry of Industry to the employer. According to him this letter had been received in response to a clarification sought by the employer vide its letter dt. 24th June, 1977. In support of his arguments the learned counsel also referred to various other letter is received from the Government of India and appended at pages 27 30 of the paper book. He also invited our attention to page 33 of the paper book which was the Copy of the application made and wherein had been detailed the terms of the service contract between the company and the assessee. It was submitted that column (a) in the said application mentioned the salary of Rs. 8,000 P.M. with the annual increment of Rs. 500 P.M. and column (f) mentioned the payment of "bonus" as applicable to the other officers of the company. It was also stated that various other clauses of the application mentioned other types of payments to the assesses such as gratuity, provident f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service rather than the quantum of individual items of payment. The only items which had been specified were the salary per month and the annual increment We accordingly concur with the CIT(A) and hold that there has been no violation of the provisions of s. 10(6)(vii)(a) insofar as they pertain to the quantum of payment made to the assessee in respect of salary and allowances 14. We are also in agreement with the decision of the first appellate authority insofar as it pertains to the date on which the approval was accorded by the Government. The word mentioned in the section are "1st day of October of the relevant assessment year". The approval was obtained on 4th Dec., 1980 as against the due date of 1st Oct., 1981. The ITO has wrongly adopted the date as 1st Oct., 1980 viz. the 1st day of October, of the previous year. 15. Before we part with this appeal we would like to mention that it escapes our comprehension as to how the Department came up in appeal for asst. yr. 1981-82 and not 1980-81 although the factual position obtaining in asst. yr. l980-81 was also the same. The CIT passed identical orders under s. 263 for both the years as also the ITO giving effect to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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