Law:

Section:

Section 15, read with section 17(2)/(3), of the I ncome-tax Act, 1961-Salaries- Perquisites chargeable as profits in lieu of salary-On assessee's retirement from world health organisation, his children received Rs. 13,500 from united nations joint staff pension fund-ITO included said amount in assessee's total income under section 17(2)(iii)-W hether tribunal correct in holding that one-third of amount was liable to be excluded from assessee's total income as the same was receivable by children and was not a perquisite or profits in lieu of salary of assessee- Held, on facts, yes Facts The assessee, retiring from the World Health Organisation (WHO), received pension from the United Nations Joint Staff Pension Fund. In addition, his children also received a sum of Rs. 13,500 from the same fund. The assessee claimed the said amount to be exempt from tax. The ITO rejected the claim and included the said amount in the assessee's total income. On appeal before the AAC, the assessee took the plea that at least one-third of the impugned amount should be excluded from the taxable income under the provisions of section 17(3)( ii), because under the Rules of the United Nations Joint Staff Pension Fund the assessee had been contributing every month 7 per cent of his pensionable remuneration and 14 per cent had been contributed by his employer and it was only this contribution of 21 per cent, which had been pooled into the aforesaid Fund, that was being returned to him in the shape of retirement benefit. The AAC accepted the assessee's plea. On cross appeals, the Tribunal upheld the AAC's order on the grounds, inter alia, (i)that the sum of Rs. 13,500 was strictly for the benefit of the children who had the right to receive it and could not in any sense be described as pension receivable by the asses-see, nor was it a perquisite as it did not fall within any of the categories set out in section 17(2); and (ii) that it was also not permissible to include it as "profits in lieu of salary" as defined in section 17(3)( ii), as the payment, strictly speaking, was not received by the assessee. On reference: Held From a perusal of the provisions of the United Nations (Privileges…

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