TMI Blog1979 (7) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... that for the personal use of the car the employer received Rs. 1,500 in each of the three assessment years under appeal. The ITO took the view that under proviso (ii) of s. 16(i) of the Income-tax Act, 1961 (hereinafter referred to as the said Act) where any motor car provided to the assessee by his employer is used for the personal purposes of the assessee the standard deduction shall not exceed Rs. 1,000. The assessee claimed standard deduction of Rs. 3,500 u/s. 16(i) of the said Act on the plea that he is being charged by the Company for personal use of the vehicles. The ITO held that the assessee was provided a motor car by the employer for personal use and the fact that the company charges a sum of Rs. 1,500 from the assessee would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From this note the AAC found that it was mentioned "with immediate effect the Company car is hereby allotted to you for use for official purpose only. If, however, this car is used by you to limited extent for your personal purposes, appropriate recovery will be made from you for such personal use". The AAC held that it was view of this condition that in each of the three assessment years the assessee had to pay Rs. 1,500 to his employer for personal use of the car. He also took the view that it cannot be said that the car is provided by the employer for use by the assessee otherwise than wholly and exclusively in the performance of his duties. The AAC, therefore, held that the assessee was entitled to standard deduction at the rate laid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation of proviso (ii) of s. 16(i) of the said Act. Proviso (ii) lays down that where any motor car is provided to the assessee by his employer for use of the assessee, otherwise than wholly and exclusively in the proformance of his duties then the deduction shall not exceed Rs. 1,000. This clause clearly goes to show that it must be a free use of the motor car. The AAC has pointed out that the Company car was allotted to the assesses for use for official use only and it was also specifically pointed out to the assessee that if he uses the car for personal purposes to a limited extent then appropriate recovery was to be made from the assessee for such personal use. It was due to this that the assessee had to pay Rs. 1,500 in each m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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