Law: Income Tax Act, 1922

Section: 7(1)

Income-tax Act, 1922 -Section 7(1) Explanation 1 - Perquisite -Company -Managing Director staying free of rent at company's guest house, whenever on tour on company's business -Permission to stay given by company -Inherence of legal right to occupy the guest house lacking -Permission to stay free of rent, whether perquisite -Held no -" Residence ", meaning of -- Employee permitted to stay at Employer's guest house while on official tour -Rent free occasional occupation -Not a "perquisite" -Taxability of perquisite -Test indicated -- Corresponding Sections: Income-tax Ordinance, 1979 -Section 16(1) -- ORDER {The order was passed by H. U. SIDDIQUI, Judicial Member}. ---These three appeals filed by the Department arise from the Appellant Assistant Commissioner's order relating to the assessment years 1959-60, 1959-60 (Supplementary) 1960-61. 2. As the question on dispute is common to all the appeals they will be disposed of by one order. The facts of the case are that the appellant, who is a Managing Director of the Murree Brewery Company Ltd., Rawalpindi, derived his income from the Director's fees, commission and dividends from the said company. He was also permitted by the company to stay at its guest house when ever he visited Rawalpindi in connection with company's business. The Income-tax Officer treated this as a perquisite and evalued it at Rs. 3,600/ per annum and added the amount to the appellant's total income in respect of the assessment years under consideration. On appeal to the Appellate Assistant Commissioner these additions were deleted, firstly, on the ground that there was no relationship of master and servant between the company and the appellant and therefore whatever income he received by way of Director's fees could not be treated as salary with the result that the permission to stay at the company's bungalow Rawalpindi could not be treated as a perquisite; secondly, he held that this facility to occupy rent free accommodation was on a par with the case of a Government Official who is allowed the use of a Rest house or a Dak Bungalow when he is on tour. The conception of rent free accomodation, he observed, necessarily entailed the exclusive…

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