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TMI Blog1981 (9) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... so of the view that since the assessee is in receipt of perquisites from the above concerns, the standard deduction u/s 16(1) of the IT Act, 1961 should be restricted to Rs. 1,000. Accordingly assessment was completed on 30th Dec, 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 company 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 added in the hands of the assessee at Rs. 5,400. Since the value of the perquisite is not includible in the hands of the assessee, he is entitled to full deduction of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perquisite obtained from the company. Reliance was placed on the decision in the case of CIT vs.A.R. Adaikappa Chettiar and Another (1972) 91 ITR 90 (Mad). 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 u/s 16(i) of the IT Act, 1961. 5. The ld. Deptl. Rep. Supported the order of the ld. CIT (A) and contended that on the facts and in the circumstance of the case, the company impliedly provided the use of the car to the assessee for his private and personal purposes also. Thus, according to the ld. Deptl. Rep. The ITO was justified in making the addition of Rs. 5,400 for car perquisite. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such company in respect of any obliagation 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 'benfit' had come up for consideration in the case of Owen vs.Pook, Inspector of Taxes (1969) 74 ITR 147 (HL), Lord Pearce observed that perquisite means a personal advantage but would not include a mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1975) 100 ITR 629 (Mad) and CIT vs.A.R. Adaikappa Chettiar and Another (1972) 91 ITR 90 (Mad). 11. We are not in a position to agree with the contention of the revenue that the word "obtained" occuring in s.2(24) of the Act need not be agreement oriented, that the word 'obtained' merely 'taken' and that if the director is in a postition 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 treated alike for the purpose of s.17(2)(Iii) of the Act, 1961. If the contention of the revenue is accepted it will mean that the advantage taken by the director or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit 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 prequisite. In support of the aforesaid proposition we also ge help from r. 3(c)(i) of the IT Rules, 1962. 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 actuallly expended by the employer, as the aggregate of such sum and the amount representing the normal wear and tear of the motor-car. Rule 3(c)(ii) provides that the value of a motor car provided by the employer for use by the assessee partly in the performance of his duties and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken. 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 had 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 dervied advantage from the company without its authority or knowledge and as such it will not amount to a benefit or perquisite obtained as defined in s. 2(24) read with s.17 of the IT Act, 1961. Thus, the learned ITO was wrong in adding the sum of Rs. 5400 as income of the assessee u/s 17(2) of the Act, 1961. 17. Since the assessee did not obtain any benefit or perquisite as req ..... X X X X Extracts X X X X X X X X Extracts X X X X
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