TMI Blog1984 (8) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... x Act, 1961. 3. The Tribunal is also requested to adjudicate on the point whether the benefit arising out of interest-free loan is a perquisite within the meaning of section 17(2)(iii) of the Income-tax Act, 1961 as this point remains to be decided vide Tribunal's order in IT Appeal Nos. 928 to 931 (Chd.) of 1975-76 dated 31-3-1977. 4. It is prayed that the order of the Commissioner (Appeals) be set aside and that of the ITO restored. 3. The facts briefly stated are like this. The assessee, Shri Surinder Chand Banta (the assessee), is an employee of Vicks Products Inc. (VPI) and derives income from salary and dividends. VPI in India is a branch of Vicks Products Inc., New York, USA, VPI, USA is stated to be hundred per cent subsidiary of Richardson Marral Inc., New York (RMI). In 1963, RMI obtained permission from the Government of India to form a new company under the name and style of Richardson Hindustan Co. Ltd. (RHL), with a share capital of Rs. 15 lakhs divided into five lakh shares of the face value of Rs. 10 per share. The Government of India allowed RMI to take 50 per cent of the total shareholding in new company RHL, the remaining 45 per cent shareholding was requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment year Value Rs. 1971-72 30,150 1972-73 23,680 1973-74 24,000 1974-75 23,320 5. Aggrieved by the above orders of the ITO, the assessee filed appeal before the AAC who held that no income by way of perquisite accrued to the assessee as a result of the grant of interest-free loan and that the requirements of section 17(2)(iii) were not satisfied. He, therefore, deleted the additions for all the four assessment years. 6. The revenue filed appeals against the above order of the AAC deleting the additions before the Tribunal. At the time of hearing of appeals before the Tribunal, the departmental representative took the following identical additional ground of appeal in each of the four years : "That in any case the amount represented benefit obtained by the assessee from VPI and liable to tax as income within the meaning of section 2(24)(iv) of the Income-tax Act, 1961 and the learned AAC has erred in deleting the addition of that sum." On the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts Inc. is not a benefit in the hands of the appellant within the meaning of section 2(24)(iv) of the Income-tax Act, 1961." 8. The learned counsel for the assessee also pleaded before the Commissioner (Appeals) that he should adjudicate upon the other point as to whether the benefit arising out of interest-free loan was a perquisite within the meaning of section 17(2)(iii) as this issue had not been adjudicated upon by the Tribunal because the appeals were restored to the file of the AAC on the additional ground. The Commissioner (Appeals) declined to adjudicate as to whether the value of the benefit of interest-free loan was a perquisite within the meaning of section 17(2)(iii) which could be included in the income, of the assessee. According to him, the directions of the Tribunal were limited with regard to the additional ground only regarding taxability of the value of the benefit of interest-free loan as perquisite within the meaning of section 2(24)(iv). The effect of the order of the Commissioner (Appeals) is that the Tribunal has now to consider both the issues, i.e., perquisite within the meaning of section 2(24)(iv) and section 17(2)(iii). For the purpose of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have already said earlier that the revenue has miserably failed to bring any evidence on record to establish that the assessee was one of the four categories of persons listed in section 2(24)(iv). At the time of hearing of the appeal before us, even the designation of the assessee with VPI was not known either to the departmental representative or the learned counsel for the assessee. In such circumstances, we have no hesitation in confirming the conclusion arrived at by the learned Commissioner (Appeals). 11. We have now to consider as to whether the value of the benefit of interest-free loan was assessable as a perquisite in the hands of the assessee within the meaning of section 17(2)(iii). Before considering this issue it may be recalled that this issue does not arise out of the impugned order of the Commissioner (Appeals). We have said earlier that this issue arises out of the orders of the AAC which came before the Tribunal in the first round of appeals in IT Appeal Nos. 928 to 931 of 1975-76. These appeals having already been disposed of by the Tribunal vide its order dated 31-3-1977, the same were recalled by us and heard together with these appeals. The issue with rega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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