Law:

Section:

Rule 24A of the Indian Income-tax Rules, 1922 - Perquisites - Valuation of - Whether amount of income-tax paid by employer on behalf of employee should be included in "salary" for purpose of finding out value of rent-free accommodation provided by employer to said employee - Held, yes FACTS The assessee was given rent free quarter by his employers. The employers also paid the income-tax of the assessee. The Income-tax Officer opined that in arriving at the value of the rent-free quarters, the income-tax paid by the assessee's employer should also be taken into account, as "salary". The AAC affirmed ITO's order. On second appeal, the Tribunal reversed the orders of the authorities below. On reference : HELD Rule 24A of the Indian Income-tax Rules, 1922 defines the word "Salary", and that is an inclusive definition. There it includes pay. Therefore, the income-tax paid by the employer is really part of the salary of the assessee within the meaning of the definition of the term in rule 24-A and that it must be included in the income of the assessee for the purpose of finding out the value of rent-free accommodation given to the assessee by the employer. Note : The decision was in favour of the revenue. CASE REFERRED TO North British Railway Co. v. Scott [1922] 8 TC 332 (HL). JUDGMENT Mathew, J.-This is a reference under section 256(1) of the Income-tax Act, 1961, at the instance of the Commissioner of Income-tax. The question of law referred is: "Whether the tax borne by the assessee's employer was includible in the total amount of salary for the purpose of computing the value of the rent-free accommodation given to the assessee under rule 24A of the Indian Income-tax Rules, 1922 ?" The assessee is an employee of the National & Grindlays Bank Ltd. He was given rent-free quarters, as also allowances, such as car allowance, servants allowance and fuel and electricity allowance. The employers had paid the income-tax of the assessee to the extent of Rs. 10,220. The assessee was in India during the period January 1, 1960, to December 12, 1960, The salary and allowance during this period came to Rs. 21,535. The assessee calculated the value of the rent-free quarters…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492