Law: Income Tax Act, 1961

Section: 2

Income-tax---Income---Perquisite---Assessee, Director in company---Certain debit balance in books of company against assessee---I.T.O. adding value of benefit as income of assessee---Finding by Tribunal that value of benefit was not income within the meaning of S.2(24)(iv)---Is not correct in view of decision in Lingappans case---No contrary view taken by other High Court---Addition of value of benefit as income of assessee---Justified--¬Indian Income Tax Act, 1961, S.2(24)(iv). For the assessment years 1973-74 and 1974-75, the Income-tax Officer noticed certain debit balances in the accounts of the company G, against the assessee and formed an opinion that the assessee, who was one of the directors of the company, had derived benefit from the company assessable to tax within the meaning of section 2(24)(iv) of the Income Tax Act, 1961, and, accordingly, the value of the benefit was added to the income of the assessee. The Appellate Assistant Commissioner, on appeal by the assessee, deleted the addition. The Tribunal held that the value of benefit derived by the assessee from the company was not income within the meaning of section 2(24)(iv) of the Act. On a reference: Held, that the Tribunal was not correct in holding that no income within the meaning of section 2(24)(iv) was assessable in the hands of the assessee. CIT v. S. S. M. Lingappan (1981) 129 ITR 587 (Mad.) and CIT (Addl.) v. A. K. Lakshmi (1978) 113 ITR 368 (Mad.) fol. JUDGMENT This common order shall govern the disposal of two I.T.Rs., namely, I.T.R. No.174 of 1985 and I.T.R. No. 211 of 1985 arising out of two different assessment years though in respect of the same assessee and on the same facts and law. The questions referred for the opinion of the High Court are: Assessment year 1973-74 (I.T.R. No. 211 of 1985): "Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that no income within the meaning of section 2(24)(iv) is assessable in the hands of the assessee?" Assessment year 1974-75 (I.T.R. No. 174 of 1985): "Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that no income within the meaning…

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