Law:

Section:

Section 17 (2) of the Income-tax Act, 1961 - Salaries - Perquisites Where Assessing Officer had treated club membership paid by assessee- company for executives as perquisite and certain expenditure on soft furnishings at the residence of its executives also as perquisites, and Assessing Officer, while doing so, did not consider material made available by assessee, matter was to be remanded to Assessing Officer to consider such evidence to ascertain factual aspect of matter [Case remanded] The assessee-company paid club fees on behalf of its executives, who were members of respective clubs, on account of the fact that they happened to be the executives of the company. According to the assessee, corporate membership had been obtained by the company for the benefit of the assessee and it was not a perquisite in the hands of the assessee's executives. The Assessing Officer, however, treated it as perquisite. Further, the assessee had also incurred certain expenditure on soft furnishings such as linen, table cloth, curtain, carpet, crockery and cutlery at the residence of its executives. The expenditure incurred under this head was also treated as perquisites. Held that, the assessee contended that the Assessing Officer had proceeded on the assumption that as the company had consistently refused to furnish the names of the senior executives who were the beneficiaries of these payments, he had no choice but to add a sum to the total salary disbursement by the employer and calculate the tax. Along with a letter, list of executives who were conferred the said benefit was also furnished and if the Assessing Officer wanted to verify, he could have done so. But this had not been taken into consideration at all and on the wrong premise he proceeded to decide the matter against the assessee. Even though this material piece of evidence was available with him, but the same had not been taken into consideration. Hence, the matter was to be remanded to the Assessing Officer to reconsider the whole issue in the light of the letter together with annexure annexed therewith, to ascertain the factual aspect of the matter. M. V. Seshachala for the Appellant S. Parthasarathi for the…

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