TMI Blog1981 (11) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... ----------------------------------------------------------------------------------------------------------------- Names of the countries Date of departure Date of arrival Amount of Amount of visited fromIndia back in allowance unspent India granted allowance for the for the visit trip (Rs.) (Rs.) -------------------------------------------------------------------------------------------------------------------------------------------------- U.S.S.R. 18-7-1976 21-8-1976 20,853.88 8,737.50 Czechoslovakia,France United Kingdom,Italy United Kingdom, 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --------------------------------- --------------------------------- ------------------------------ Amount Amount Amount Amount Amount Amount paid saved paid saved paid saved -------------------------------------------------------------------------------------------------------------------------------------------------- Chief Executive 6,365 3,237 87,118 35,718 31,148 7,107 Director (Finance Administration) ---- ---- 11,395 4,229 ---- ---- Director --- --- ---- ---- 20,671 7,713 (Technical) Chief Development 19,864 10,188 --- --- ---- ---- Manager Chief Commercial Manager --- --- ---- ---- 7,199 1,221 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king of dresses, purchase of travel goods, etc., and had also to incur expenditure on reciprocal basis by providing accommodation, food, local conveyance expenses at and gifts in respect of visits of foreigners to India in connection with his duties. It was urged that if the entire expenses were taken into account there would be no savings out of the aforesaid allowances. He also explained that as foreign exchange was involved sanction of the Reserve Bank ofIndiawas invariably obtained. The AAC held that as the amount was paid for a specific purpose, the nature of the receipt of the sum in the hands of the assessee could not be held to be income. The AAC also held that since it was not a regular allowance its nature was not of income and the provisions of section 10(14) were not attracted. The AAC also observed that there was force in the assessee's contention that if all the expenditure incurred by him inIndiaas well as abroad were taken into account, there would be hardly any savings out of the amount received. The AAC, therefore, deleted the sum of Rs. 24,244 from the assessment. 6. The revenue is aggrieved by this order of the AAC. The learned departmental representative refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the amount received by the assessee was not salary then it could not still be considered as income under any other head. He submitted that for holding that the sum of Rs. 24,244 represented salary, income or not, a reference had to be made to section 17. Under section 17 it had to be determined whether this amount could be considered to be a perquisite in the hands of the assessee, he submitted that the amount was not a perquisite because the Gujarat High Court in CIT v. S.G. Pgnatale [1980] 124 ITR 391 at page 402 had enunciated the principle that the word "perquisite" would not apply to a mere reimbursement of necessary disbursement. He also referred to the judgment in CIT v. D.R. Phatak [1975] 99 ITR 14 (Bom.), wherein it was held that city compensatory allowance was not a perquisite within the meaning of section 17(2). He also referred to the judgment in Addl. CIT v. A.K. Misra, ITO [1979] 117 ITR 342 (All.), wherein it was held that city compensatory allowance will fall within the Explanation to section 10(14) and was not exempt from tax. The Explanation to section 10(14) was inserted retrospectively by the Finance Act, 1975. He submitted that in spite of the insertion ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General Finance Ltd. The aforesaid judgment of the English Court of Appeal had been followed in Kohinoor Mills Co. Ltd. v. CIT, CIT v. Sandersons Morgans, Bijli Cotton Mills (P.) Ltd. v. CIT and CIT v. Motor General Finance Ltd. In Kohinoor Mills Co. Ltd. v. CIT the unclaimed wages, the recovery of which was barred by limitation, were held to be not taxable as income. In CIT v. Sandersons Morgans the unrefunded clients' moneys in the hands of solicitors in respect of which the clients' claim had become barred by limitation and which was transferred to the profit and loss account and apportioned amongst the partners, were field to be not in the nature of trading receipts. In Bijli Cotton Mills (P.) Ltd. v. CIT it was held that although the assessee received the wholesale price, the part representing the ex-mill price alone belonged to it while the balance belonged to the quota-holders. From the outset the excess over the ex-mill price was impressed with the character of trust money, to be held by the assessee on behalf of the quota-holders. It was also held that the consideration applied by the Tribunal that the amount belonging to the quota-holders could not be recovered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 17(3). The amount received by the assessee by way of daily allowance cannot be termed as perquisite because this payment was made for the daily expenditure that the assessee was to incur during his visit abroad. In CIT v. S.G. Pgnatale the Gujarat High Court following the decision of the House of Lords in Oven v. Pook (Inspector of Taxes) has held that a perquisite is something which arises by reason of a personal advantage but the word "perquisite" would not apply to a mere reimbursing of necessary disbursement. The amount received by the assessee cannot thus be called as perquisite. Since the amount received cannot be considered as a perquisite, and since it is not a part of salary as said, the said amount cannot be taxed as income under the head "Salaries". 12. Since we have held that the amount received by the assessee is not ab initio income and is thus not taxable under any head of income, there is no question of considering the question of exemption under section 10(14). In this view of the matter, it is not necessary to go into the case laws relied on by the parties on this point. 13. For the aforesaid reasons, we hold that the sum of Rs. 24,244 does not represent in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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