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TMI Blog1985 (5) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. According to him, this concession amounted to 'perquisite' in terms of section 17(2)(iii)(c) of the Income-tax Act, 1961 ('the Act'). According to this section, perquisite includes the value of any benefit or amenity granted at concessional rate by an employer (including a company) to an employee whose income under the head 'Salaries', exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds Rs. 18,000. There was no dispute that the income of the assessee under the above head excluded Rs. 18,000. According to the IAC, therefore, the assessee was provided with a benefit which amounted to perquisite and was, therefore, liable to be assessed as income from salary under section 17(1)(iv). The value of the concession was worked out by him at Rs. 19,444. Since this amount had not been taxed in the original assessment and had also not been shown in the return or disclosed to the department, proceedings under section 147(a) of the Act were started against the assessee. In this connection, the ITO specifically referred to a decision of House of Lords in Abbot v. Philbin (Inspector of Taxes) [1962] 44 ITR 144. 2. On behalf of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal assessment, the assessee had returned the value of this perquisite at Rs. 2,548. In the opinion of the IAC, this was low. He considered a similar question in the assessment year 1973-74 and following his finding in that year, he computed the value of the perquisite in the form of rent-free residential accommodation at Rs. 8,135. According to him, it was not necessary to apply the provisions of section 147 once again to the case, as the assessment had already been reopened. He recomputed the value of the perquisite at Rs. 8,135 and included it in the assessment in place of Rs. 2,548 originally assessed. 5. The assessee appealed to the Commissioner (Appeals). The Commissioner (Appeals) was of the opinion that the provisions of section 147(a) did not apply to the case as the assessee could not foresee that there was any concession in the sale of plots to him. He was further of the view that the assessee had not failed or omitted to disclose any facts necessary for his assessment. According to him, therefore, the provisions of section 147(a) were not applicable to the assessee's case. He then considered whether the assessment could also be reopened under section 147(b) in regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, his case is that he had also included the above plot in his wealth-tax return. In our opinion, none of these amount to disclosure of any primary facts. As rightly pointed out by the IAC in his order, production of account books or other evidence, from which material evidence could with due diligence had been discovered, was not necessarily to amount to disclosure. Production of pass books fell under this category. Inclusion of the plot in the wealth-tax return was of no consequence as that disclosure was not under the Act. We do not agree with the finding of the Commissioner (Appeals) that the assessee could not think that he was provided any benefit or concession by its employer and, therefore, it was not possible for him to disclose such benefit in his return. He has clearly gone wrong in law in this regard. We have already stated above that the assessee's duty was to disclose primary facts and not to tell the ITO that he had gained any benefit or perquisite as such. The Commissioner (Appeals) failed to consider the first aspect, i.e., the omission or failure on the part of the assessee to disclose primary facts necessary for his assessment. In our opinion, therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which concessional rate had been charged from them in the sale of plots in Anandpuri colony. The contention of the learned departmental representative was that the concession was an incident to the employment of the assessee and, therefore, it amounted to a perquisite in terms of section 17(2)(iii)(c). In this connection, he again referred to the decision of the House of Lords in Abbot's case. 12. In our opinion, the stand of the learned departmental representative requires to be accepted. In the case of Abbot, the secretary of a company was granted an option to purchase certain shares in the company at a concessional rate. In this connection, the Court, in the words of Lord Radcliffe, made the following observations: "... I think that the conferring of a right of this kind as incident of service is a profit or perquisite which is taxable as such in the year of receipt so long as the right itself can fairly be given a monetary value..." 13. A similar position is available in the present case also. As would appear from the preamble of the scheme formulated by the company, there was a request from its officers and staff members for some concession in the rate as also for payme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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