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TMI Blog1981 (9) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... s the ITO valued the perquisite in accordance with rule 3(c)(vi) of the Income-tax Rules, 1962 ("the Rules"), at Rs. 5,400. He was also of the view that since the assessee is in receipt or perquisite from the above concerns. the standard deduction under section 16(i) of the Income-tax Act, 1961 ("the Act"), should be restricted to Rs. 1,000. Accordingly, assessment was completed on 30-12-1978 on a total income of Rs. 94,615. 2. The assessee, being aggrieved with the order of the ITO, took up the matter in appeal and, inter alia, submitted that the employer, namely, the companies, never provided the car for the use of the assessee exclusively for his private or personal purposes also and as such the value of the perquisite was wrongly adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyer in the salary certificate did not show the value of perquisite of the use of the car. If the assessee has used the car for his private and personal purposes, it will not include the benefit or perquisite obtained from the company. Reliance was placed on the decision in the case of CIT v. A. R. Adaikappa Chettiar [1973] 91 ITR 90. Since the assessee was not allowed the use of motor car by the company otherwise than wholly and exclusively in the performance of his duties, the assessee is entitled to full deduction of Rs. 3,500 under section 16(i). 5. The learned departmental representative supported the order of the learned Commissioner (Appeals) and contended that on the facts and in the circumstances of the case the company impliedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person aforesaid;" 8. The word "perquisite" is defined in the Oxford Dictionary as "any casual emolument, fee or profit attached to an office or position in addition to salary or wages". Perquisite denotes a personal advantage it is something that benefits a man by going "into his own pocket" it does not cover a mere reimbursement of travelling or other expenditure incidental to the employment. The import of the word "b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvantage or benefit can be brought to charge under section 2(24) of the Act. In support of this proposition we are fortified by the ratio of decision in the cases of CIT v. C. Kulandaivelu Konar [1975] 100 ITR 629 (Mad.) and CIT V. Adaikappa Chettiar. 11. We are not in a position to agree with the contention of the revenue that the word "obtained" occurring in section 2(24) of the Act need not be agreement-oriented, that the word "obtained" merely means "taken" and that if the director is in a position to take a benefit with a view to help himself, even without the authority of the company or against its wishes, he will be governed by the said provision and that both the authorised and unauthorised benefits taken or received are to be tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enforce its restitution. 13. If we read section 2(24) and section 17 it would be clear that in order to be taxable income, the perquisite or benefit should have been authorised by the company and the value of any unauthorised benefit in respect of which the director would be liable to make restitution to the company is not a perquisite. In support of the aforesaid proposition we also get help from rule 3(c)(i) of the Rules. According to this rule, the value of a motor car provided by the employer for use by the assessee exclusively for his private or personal purposes shall be determined as the sum actually expended by the employer on the maintenance and running of the motor ear during the relevant previous year and where the motor car i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrangement or agreement. A mere advantage derived from the company without its authority or knowledge will not amount to a benefit or perquisite obtained. The word "obtained", according to the said section, need not be agreement-oriented and cannot merely meant taken. Before a person could be said to have obtained a benefit or perquisite from a company, there should be some legal or equitable claim. 16. The assessee, being director and employee of the company, has used the motor car supplied by the company for his private and personal purposes for which there was no sanction or authority by the company. Thus the assessee derived advantage from the company without its authority or knowledge and as such it will not amount to a benefit or pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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