1964 (4) TMI 4 - SUPREME COURT

Interpretation of section 7(1) of the Indian Income-tax Act, 1922 questioned

Held that:- As no interest in the sum contributed by the employer under the scheme vested in the employee, as it was only a contingent interest depending upon his reaching the age of super-annuation. It is not a perquisite allowed to him by the employer or an amount due to him from the employer within the meaning of section 7(1) of the Act.

We, therefore, hold that the High Court has given correct answers to the questions of law submitted to it by the Income-tax Appellate Tribunal that the employer's contribution under the terms of the trust deed was not a perquisite as contemplated by section 7(1) of the Act. The employer's contributions were not allowed to or due to the employee in the accounting year. And the Legislature not having used the word " deferred " with annuity in section 7(1) and the statute being a taxing one, the deferred annuity would not be hit by paragraph (v) of Explanation 1 to section 7(1) of the Act. Appeal dismissed