Law:

Section:

Section 10(14) of the Income-tax Act, 1961 - Exemption - Special allowance or benefits other than entertainment allowance or perquisite - Assessee was an employee of a foreign company - He was provided with rent free accommodation by foreign company while on tour in India for discharge of his official duty - Whether benefit derived by assessee on account of rent-free accommodation was exempt under section 10(14) - Held, on facts, yes Facts The assessee was employed in a foreign company. The foreign concern was entrusted with the work under an agreement an with Indian company for erection of gas turbines. In this connection, it deputed assessee-engineer to India to supervise the erection, work. While staying in India the assessee was provided with rent-free accommodation. The ITO opined that the rent-free accommodation provided by the foreign company was in the nature of perquisite and added Rs. 40,111 as perquisite. On appeal, the Commissioner deleted the amount on the ground that the assessee was on official tour to India and the benefit of rent-free accommodation was exempt under section 10(14). This was upheld by the Tribunal. On reference: Held The assessee was provided with rent-free accommodation by his employer while he was on tour in India. It had been found by the Tribunal as a fact that the rent-free accommodation was provided by the foreign company to the assessee necessarily for the discharge of his official duty for which he was sent to India. He visited India several times between May 1977 and March 1980. The assessee was not occupying the rent-free accommodation by virtue of his posting as an employee of the foreign company in Calcutta. It was in connection with his official duty. For the purpose of supervising the erection of gas turbines at Calcutta, Siliguri and Haldia the assessee had to visit these places. Such visits were in connection with his official duty. Therefore, the expenditure could not be treated as a benefit given to the assessee and the benefit was exempt under section 10(14). R.C. Prasad for the Applicant. R.N. Dutta for the Respondent. JUDGMENT Sengupta, J. - The assessee is a permanent employee of John Brown Engineering…

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