TMI Blog2000 (11) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... ses also the employees of these concerns were provided with free accommodation and free board. It was claimed as exempt. The accommodation in question was merely a bunker in a steel container measuring only 7 x 7 . It was occupied only by the employee where he was on his 28 days stint of duty. After the completion of the duty the assessee used to go to his country. The accommodation was at the work site. The provision of this accommodation was said to be essential for executing the drilling work. De hors such accommodation, it was not possible to work continuously. The assessee was maintaining his residential accommodation in his country. The assessee was engaged on a single status as assistant driller located onshore India. The point of origin was Italy. The assessee was required to work on shift for 56 continuous days followed by 28 continuous days of rest at home. The company was under obligation to provide return ticket to Italy after 56 days of work. The assessee was under obligation to make himself available on call at all times during his stay at the work site. As per clause VI of the agreement dated December 19, 1984, with SAIPEM spa., the company was to provide to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was, sine qua non, to provide the accommodation. It was impossible to work without such accommodation. The assessee was maintaining accommodation in Italy. The food and refreshment was provided at the work place. As such, it cannot be construed to be perquisite. Learned counsel argued that before any taxable perquisite can be said to accrue to the employee, it is essential that following conditions be satisfied : (i) There should be residential accommodation provided by the employer to the employee ; (ii) There should be benefit or gain arising to the employee ; (iii) The benefit or gain should arrive by way of remuneration for services rendered ; and (iv) The benefit or gain should be capable of being assigned the monetary value. Taking us to the facts of the present case, it was submitted that none of the aforesaid conditions did exist in the present case. The accommodation in question was not at all residential accommodation. Our attention was invited on the decision of the Tribunal rendered in the case of Earl W. Tallent v. ITO (Second) [1987] 20 ITD 512 (Bom). Further it was argued that a perquisite should essentially contain an element of personal advantage to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial duties for which he was sent to India. The assessee was not occupying the rent free accommodation by virtue of his posting as the employee of the foreign company. Therefore, the High Court held that the expenditure incurred in providing the rent free accommodation was wholly and exclusively incurred for the purpose of performing the official duties. As such it was not treated as a perquisite. Learned counsel submitted that in the present case also the accommodation was provided wholly and exclusively for the purpose of performing the official duties. As such, it cannot be construed as a perquisite. Next it was argued that in the given circumstances the provisions of boarding and lodging did not bear any monetary value. In the eventuality of not accepting food, there was no provision for recompense. Reference was made to the decision of the House of Lords in the case of Abbot v. Philbin [1962] 44 ITR 144. In this case it was held that the benefit is exigible to tax only if it lends to a definite monetary value. Learned counsel submitted that the accommodation had no commercial value whatsoever. As such, there is no question of its being a perquisite. Shri Vohra also relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age derived by the assessee in most of the cases emanated out of the contractual obligation. As such the assessee did have vested right. The learned Departmental Representative heavily relied on the decision of the Hyderabad Bench of the Tribunal rendered in the case of Saipem India Project Office on behalf of Manfredo, France etc. being I. T. A. No. 408 (Hyd) of 1987. Further, the learned Departmental Representative relied on the decision of the Andhra Pradesh High Court rendered in the case of Zdzizlaw Skakuz v. CIT [1986] 158 ITR 420. In this case, one Z was an employee of a Polish firm which had entered into an agreement with an Indian company. Under the terms of the agreement, Z worked in India. He received his salary, outstation allowance and hotel charges from the Polish firm and the Indian company agreed to pay income-tax due and payable on the income earned in India. The salary received by the assessee during his stay in India was liable to be taxed under the Income-tax Act. The Assessing Officer treated the outstation allowance, hotel charges receipt from the Polish firm and the taxes paid by the Indian company also as income of the assessee. Subsequently, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly one of a kind expected or promised . In Murray's English Dictionary it is defined as any casual emolument fee or profit attached to an office or position in addition to salary and wages. Similarly, the expression perquisite is defined in the Oxford Dictionary as casual emolument, fee or profit attached to an office or position in addition to salary or wages . Perquisite has a known normal meaning, namely, a personal advantage. The word would not apply to a mere reimbursement of a necessary disbursement. This view was taken by the House of Lords in the case of Owen v. Pook [1969] 74 ITR 147. In this case the assessee was a general medical practitioner in Fishguard. He also held two part-time appointments, at a hospital in Haverfordwest, 15 miles from Fishguard. Under those appointments the assessee was on stand-by duty at certain specified times, to deal with emergency cases at the hospital and at such times he was required to be accessible on telephone. On receipt of a telephone call from the hospital the assessee gave instructions to the hospital staff and then either advised and awaited a further report or set out immediately for the hospital. The responsibility for a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definitely accrued to or settled in a person that they are not subject to be defeated or cancelled by the act of any other private person. In the present case, we find that it was not a benefit as such, to the assessee. The accommodation and food were provided to the assessee, to meet the exigency of the situation. It was in the interest of the business of the employer. Drilling operation continued round the clock. Presence of the assessee on the site was a must. In the case of Ellis and The Ruislip-Northwood Urban District Council, In re [1920] 1 KB 343 (CA), at page 370, amenity was described to mean pleasant circumstances or features, advantages. Indisputably the assessee was engaged with a very difficult work. He remained vigilant round the clock for smooth running of the drilling operation. Sitting at the rig amid the water all around cannot be described to be a pleasant circumstance. As such, in our opinion, it can neither be termed as benefit nor amenity. It can also not be termed as facility or advantage because it was, sine qua non, for the execution of his duties. It had no money value to the assessee. The facility was provided to the assessee for his survival. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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