TMI Blog1998 (8) TMI 611X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 7,500 per month and 1 per cent commission on net profit, the assessee was allowed certain perquisites as enumerated in paras (a), (b) and (c ) of the explanatory statement. We are concerned with part (c) which reads as under : Part - C (i)Use of Company s Car with a driver for the company s business. (ii)Free telephone facilities at residence. It is clarified that provision of car for use of company s business and telephone at residence will not be considered as perquisite. Personal long distance calls on telephone and use of car for private purpose shall be billed by the company. The assessee was provided with a company owned car, but instead of providing a driver he was allowed to reimburse the salary of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the perquisite may be determined on the basis provided in the table below : Value of perquisite per calendar month. Where the h.p. rating of the car does not exceed 16 or the cubic capacity of the engine does not exceed 1.88 litres. Where the h.p. rating of the car exceeds 16 or the cubic capacity of the engine exceeds 1.88 litres. 1 2 3 1.Where the motor car is owned or hired by the employer and all the expenses on maintenance and running are met or reimbursed to the assessee by the employer. 600 800 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant. In view of this position there is no nexus between the company and the driver. In fact the driver would then be engaged in the personal capacity rather than as an employee of the company. As such reimbursement of a salary would have been a personal obligation of the appellant alone, and since the company is meeting the same, such reimbursement will constitute perquisite. This ground of appeal does not succeed. 3. We have heard the parties and considered their rival submissions. As per the terms of employment, the assessee was to be provided with a car and driver. The car is to be used both for the personal purpose as well as office use and to the extent it is used for office purposes there cannot arise a question of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment. The provision of clause (c)( ii) if read with the opening part of rule 3, one can say that rule 3 as such has no application in this case because the perquisite of provision for chauffeur is made by the employer by way of monetary payment in cash. The question, therefore, is what could be added in the assessee s assessment when the car is provided by the employer as per the agreement. When the car is provided both for the purposes of office as well as personal, the salary reimbursement of the chauffeur has to be for both the purposes. The salary paid at the rate of ₹ 700 per month has to be bifurcated and the payment that could be related to office, cannot be added to the income of the assessee and the remaining portion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of ₹ 150 per month. As aforesaid, the user of the car by the assessee is both for personal as well as office purposes and there is no material to bifurcate the services of thechauffeur to personal as well as office user of the car. In such circumstances, in our opinion, the statutorily recognised method of ₹ 150 per month is to be taken in the light of the aforesaid Bombay High Court decision as perquisite for the provision of the chauffeur to the assessee. We direct accordingly. 4. The next dispute is with regard to the allowability of interest of ₹ 21,849 paid on loans taken to repay the earlier loans which were admittedly used for advancing loans, the income from which is assessable under the head Income from o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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