TMI Blog2004 (9) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... y HLVL and accordingly Assessing Officer held that the income-tax, after grossing, paid by HLVL on behalf of the assessee was a perquisite to be added to the assessee s income under section 17( 2 ) of the Income-tax Act. The Assessing Officer s finding resulted into the impugned addition of Rs. 15,38,713. The assessee unsuccessfully appealed to the CIT(A). 3. The ld. counsel appearing on behalf of the assessee was fair enough to concede that by virtue of the Hon ble Supreme Court decision in the case of Emil Webber v. CIT [1993] 200 ITR 483 , the tax perquisite is chargeable to tax under section 17( 2 ) in normal cases. However, he submitted that by virtue of the provisions of section 10( 6 )( viia ), such tax perquisite is exempt in the case of the assessee as the assessee fulfils all the conditions prescribed under section 10( 6 )( viia ). It is argued that the exemption provisions override the provisions of section 17( 2 ) of the Income-tax Act. The ld. counsel forcefully contended that the Revenue authorities have failed to properly appreciate the mandatory provisions of section 10( 6 )( viia ), the relevant portion of which is under : "10( 6 ) In the case of an in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rience are actually utilized." The ld. counsel submitted that the assessee is not a citizen of India, he is an individual and has been employed as a Technician by HLVL. Thus, the assessee is rendering services as technician in a business carried on in India and therefore section 10( 6 )( viia ) is applicable in his case. It is submitted that the tax paid by the employer is exempt in his case of the employee as laid down under section 10( 6 )( viia )(A). Drawing our attention to the Explanation, the ld. counsel submitted that the assessee comes under the definition of technician as defined in clause ( iii ) of the Explanation. 4. Under the aforesaid provisions, technician means a person having specialized knowledge and experience in such other fields as notified by the Central Government and who is employed in India in a capacity in which such specialized knowledge and experience are actually utilized. The ld. counsel invited our attention to page 59 of the Paper Book which contains a copy of Notification No. 2 dated 11-10-1989 issued by the Central Government for the purposes of section 10( 6 )( viia ). This notification reads as under : "In exercise of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r attention to page 15 of the PB, which is a copy of letter dated 9-10-1990 of Government of India, approving the appointment of the assessee as Vice-President (Operations) and General Manager (Corporate). The ld. counsel referred to the subject of this letter, wherein the subject has been mentioned as engagement of Technician by HLVL. It is argued that the aforesaid letter proves that the assessee was a Technician. The ld. counsel also invited our attention to letter dated 14-2-1995 filed before the Assessing Officer by HLVL, copy of which is compiled at pages 22 to 24 of the PB. The ld. counsel has referred to the following statement made in this letter : "Mr. Rudalph Staudinger, during the course of his duties, was required to spend long hours at the hotel and partake of the food served therein, with a view to ensure that food quality was of international standards. This was more so because a majority of the hotel s guests were foreigners. Hence, it was the company s duty to provide food to Mr. Staudinger and as such the cost incurred thereon should rightfully be treated as business expendi-ture of the company and was in no way a perquisite in the hands of the assessee." The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stry shop. There is no evidence or material to prove that his services have been acquired by HLVL in that capacity. As per the Explanation under section 10( 6 )( viia ), the Technician must have speciali-zed knowledge as well as experience in the relevant field and further he must be employed in India in a capacity in which such specialized knowledge and experience are actually utilized. There is no evidence that the assessee was having experience of cookery in the past. There is also no evidence that he has been employed with HLVL in a capacity in which he has actually used his specialized knowledge and experience. Prior to his employment with HLVL, the assessee was employed with Shangri-La Hotel as General Manager. This shows that even prior to joining HLVL, the experience of the assessee was only in administration field. Considering the entire facts and circumstances and the legal position as mentioned above, we have no hesitation in holding that the assessee does not fulfil the conditions laid down under section 10( 6 )( viia ) and therefore the tax perquisite has been rightly brought to the charge of tax in his case under section 17( 2 ) of the Income-tax Act. We, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1991-92. All the grounds of appeal pertain to only one issue, i.e., addition of Rs. 37,500 on account of perquisite in respect of interest paid by the employer for the deposit in respect of the house taken on lease and provided to the assessee rent-free for his residence. Both the parties agreed that this issue is covered in assessee s favour by the Supreme Court decision in the case of V.M. Salgaokar Bros. (P.) Ltd. v. CIT [2000] 243 ITR 383 . In view of the above, the addition of Rs. 37,500 is directed to be deleted. Appeal No. 9851 - Assessment year 1992-93 11. This is assessee s appeal and the first ground of appeal pertains to confirmation by the ld. CIT(A) of addition of Rs. 20,55,015 being tax perquisite. This issue has already been decided by us while dealing with the assessee s appeal for the assessment year 1991-92. For the same reasons, we confirm the finding of the ld. CIT(A) on this issue. 12. The ground No. 2 pertains to addition of Rs. 1 lakh on the ground that provision of free food/accommodation in the Hotel was a perquisite, the value of which has to be brought to the charge of tax. This issue has also been decided by us while dealin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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