Law: Income Tax Act, 1922

Section: 4,4(3)(vi),18A,18

(a) Income-tax Act (XI of 1922)--S.4(3)(vi)--Sumptuary Allowance paid to the Ministers and other dignitories--Word "sumptuous"--Meaning sumptuary allowance having no nexus with performance of the duties of a Minister, etc. provisions of S.4(3)(vi), cannot be claimed to be attracted to sumptuary allowance for S.4(3)(vi) applies in only those cases where any allowance, benefit or perquisite was specifically granted to meet expenses wholly and necessarily incurred in the performance of the duties of an office or employment of profit--Allowance paid for regulating costly living, therefore, cannot be considered as a necessary expense in the performance of the duties of a representative office. Income-tax, Bombay City v. D.R. Phatak (1975) 99 I T R 14; Chamber's Twentieth Century Dictionary and Oxford Dictionary ref. Commissioner of Income-tax, Bombay City v. D. R. Phatak (1975) 99 I T R 14 distinguished. (b) Income-tax Act (RI of 1922)-- ---Ss. 18-A & 18--Penalty--Assessee's only source of income being salary, tax therefrom was deducted at Source in accordance with provisions of S.18-A(2)--Provisions of S.18-A, therefore, were not applicable where tax was deducted at source under S.18--Assessee was thus, not required to pay any advance tax under S.18-A--Levy -of penalty being unjustified, was ordered to be deleted by the Tribunal. ORDER AMJAD ALI (MEMBER).--This appeal has brought against the order of the Commissioner of Income-tax (Appeals), Rawalpindi, dated the 3rd May, 1981, by virtue of which he had affirmed the taxation of sumptuary allowance and certain other perquisites available to the assessee during the assessment year 1977-78. 2. During the assessment year 1977-78, the assessee-appellant (General (Retd.) Tika Khan) had held the Offices of the Special Assistant to the Prime Minister for National Security, Senator and Minister of State for Defence and National Security. It was claimed that the post of Special Assistant to the Prime Minister carried all the facilities and perquisites available to a Federal Minister and accordingly the appellant received a sum of Rs.11,050 as sumptury allowance during that year at the rate of Rs.1,000 per mensem. The…

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