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Section 17(2) of the Income-tax Act, 1961 - Salaries - Perquisite - Assessment year 1996-97 Where assessee as an employee of company got shares at rate of Rs. 10 which he sold at Rs. 15 each, assessee could be said to have been benefited under section 17(2)(ii ) [In favour revenue] The assessee's employer had issued 50,000 equity shares at a face value of Rs. 10 each to the assessee and in the same year the said company had issued 4,00,000 equity shares at Rs. 25 per share to TDICI. The Assessing Officer having found the difference in the market value of the shares allotted to the assessee, treated the difference amount of Rs. 15 per share as an escaped income. The assessee claimed that as his family members being the promoters of the employer-company, pursuant to an agreement entered into between the aforesaid company TDICI had allotted 50,000 equity shares of Rs. 10 each, and, therefore, he contended he had not acquired any benefit or amenity as required under section 17(2)( iii). The Assessing Officer rejected the assessee's contention. Held that, the assessee had contended that the assessee had been allotted shares at the rate of Rs. 10 since he happened to be an associate of a promoter of the company. On facts, the assessee could not be considered as a promoter of the said Company. Though the counsel for the assessee has relied upon the words "promoters and associates", one could not accept the argument advanced by the assessee since the word "associates" can include any person not only an employee of the company or director of the company, but it may include any person as an associate. The assessee being an employee of the company, having got allotted 50,000 shares at the rate of Rs. 10 each, he had been benefited out of such allotment when the same shares were sold at the rate of Rs. 25 per share. Thus, the assessee had been benefited as contemplated under section 17(2)( iii). M.V. Seshachala for the Appellant. S. Parthasarathi for the Respondent. JUDGMENT K.L. Manjunath, J.-This appeal is by the Revenue challenging the order passed by the Income-tax Appellate Tribunal, Bangalore Bench, in I.T.A. No. 384/Bang/2001. 2. The assessee who is an employee of…

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