TMI Blog1993 (7) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income of the assessee ?" For the assessment year 1972-73, the assessee filed a return of income disclosing a total income of Rs. 81,289. The assessment was completed on March 10, 1975. Later on, the Income-tax Officer, during the course of assessment of Messrs. Karamchand Premchand Pvt. Ltd., came to know that the said company had incurred expenditure on the foreign tours of one of its directors, Gautam Sarabhai, and his wife, Smt. Kamalini, the assessee. He also noticed that for the tour of Smt. Kamalini, the company had expended Rs. 39,753. In view of this information, the Income-tax Officer reopened the assessment and ultimately included the said amount of Rs. 39,753 in the total income of the assessee and assessed it accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He submitted that this finding has not been disturbed by the Tribunal. The Tribunal has allowed the appeal because it was of the view that the benefit or perquisite was not obtained by the assessee inasmuch as it was not possible to say that she had made any attempt to procure the same. Thus, the finding that she had received benefit as the said foreign tour was not undertaken for the business purpose of the company has not been upset by the Tribunal and no question as regards that finding of fact has been referred to this court and, therefore, it is not open to us to consider whether she derived any benefit or not. In our opinion, this contention is really misconceived. The question whether the assessee can be said to have received any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his provision in a manner which would result in avoidance of tax. Section 2(24) defines the term "income". It is an inclusive definition and clause (iv) of that definition reads as under : "the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person aforesaid." The first part of clause (iv) refers to any benefit or perquisite obtained from a company either by a director or any person who has a substantial interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch treats the benefit given by a company as income of the person who can be said to have obtained it, with the result that it would become taxable in his hands. Considering all these aspects, we are of the opinion that the word "benefit" occurring in clause (iv) would mean "any advantage, gain or improvement in condition" and only if such a thing is obtained by an assessee from a company and if the other conditions are satisfied, then and then only can the value of it be treated as his income. The material on record discloses that earlier also, the assessee had gone on foreign tours. Though it is not clear on how many occasions she had gone along with her husband for the purpose of business of the company, the purpose for which she had un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenditure incurred for these tours can be regarded as her income. We are of the opinion that the case of the assessee was certainly not covered by the first part of the said clause. In the alternative, it was contended that the case of the assessee would be covered by the second part of the clause. In our opinion, this contention is also misconceived. As pointed out above, by undertaking these foreign tours, the assessee had not incurred any obligation. She had undertaken the tours at the instance of the company and for the purpose of the business of the company. For undertaking such foreign tours, neither had she incurred any obligation nor was any obligation incurred by her husband who was a director of the company. For this reason, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
