TMI Blog2009 (7) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... y as a taxable perquisite in the hands of the employees of the appellant. (2)Without prejudice to the above, on the facts and circumstances of the case, the learned CIT(A) has erred in confirming the amount of conveyance allowance paid to the employees as primary benefit and holding the expenditure incurred in providing pick-up and drop facilities to the employees as taxable income in the hands of the employees of the appellant. (3)The learned CIT(A) failed to appreciate that the appellant has acted honestly and fairly in making an estimate of the income of the employees while deducting tax at source under section 192 of the Income-tax Act, 1961 ( the Act ). On the facts and in the circumstances of the case, the learned CIT(A) erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing paid conveyance allowance and the employees were claiming the same as exempt. The assessee was also asked to show cause as to why this additional expenditure should not be treated as a taxable perquisite in the hands of the employees. 4. Vide letter dated 1-3-2006, the assessee submitted its explanation that the transport allowance paid by an employer to its employees for meeting the expenditure on transport between their office and residence is not taxable in the hands of the employees as provided under section 10(14) read with rule 2BB of the Act. Assessing Officer was, however, not satisfied with assessee s explanation and held that amounts debited by the assessee under the head Bus hire charges are nothing but free additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurred by the assessee as an employer for providing pick-up and drop services to its employees who worked in night shifts in cars from office to residence and vice versa and for pick-up and drop facilities upto specified points only and not upto the homes of employees for those who worked in other shifts is not taxable as provided under sub-section (2) of section 17 of the Act. He submitted that Explanation to section 17(2)( iii ) was amended by the Finance Act, 1989, wherein it was stated that "for the removal of doubt, it is hereby declared that the use of any vehicle provided by a company or by employer from his residence to his office or other place of work, or from such office or place to his residence, shall not be regarded as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant provisions of law. ( a )We find that the term income has been defined in section 2(24) to include the value of any perquisite or profits in lieu of salary taxable under clauses ( 2 ) and ( 3 ) of section 17. ( b )Section 17 defines salary , perquisites and profits in lieu of salary and clause ( 2 ) thereafter defines the term perquisites to include the value of any benefit or amenity granted or provided free of cost or at concessional rate by a company to an employee who is a director thereof, or an employee being a person who has a substantial interest in the company or an employee to whom provisions of paragraphs ( a ) and ( b ) of this sub-clause do not apply and whose income under the head salaries exclusive of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit which is granted to meet expenses wholly, necessarily and exclusively for the performance of duties of an office or employment of profit. The perquisites within the meaning of clause ( ii ) of section 17 is excluded from the exemption clause. Section 17(2) gives the meaning of perquisites and sub-section (3) thereof provides for the value of any benefit or amenity granted or provided free of cost or at a concessional rate to an employee. This perquisite has to be considered as part of the income of the assessee. However, Explanation ( iii ) of sub-section (2) of section 17 clearly provides that the use of any vehicle provided by an employer to an employee for purposes of performance of his duties or for journey from his residence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the employees is below the taxable limit. In such cases even the perquisites cannot be taxed in the hands of such employees. However, there is no data available with the Assessing Officer as to who are the employees who utilizes the pick-up and drop facility and also avail the conveyance allowance. This Tribunal in the case of Transworks Information Services Ltd. cited supra has relied upon the decision of the Apex Court in the case of Sunil Sidhharthbhai v. CIT [1985] 156 ITR 509 and also the decision of CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294 (SC), wherein it was held that when a consideration is not capable of being determined on the date of transfer of capital asset, no capital gains would arise since, computatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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