TMI Blog1978 (6) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... few facts may be stated : The matter relates to the assessment of the assessee, Emil Webber, for the two assessment years 1974-75 and 1975-76. The Ballarpur Paper Straw Board Mills Ltd. (hereinafter referred to as " Ballarpur " for the sake of brevity) is a public limited company doing considerable business and having its factory at Ballarpur in India. It undertook the setting up of a Caustic Soda/Chlorine manufacturing plant, and for the purpose entered into an agreement for purchases of certain machinery and equipment with Krebs Cie (hereinafter referred to as " Krebs"), a French concern. There was a further agreement between Ballarpur and Krebs to the effect that Krebs should make available services of certain personnel including e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and discharged the obligation in accordance with the terms of the agreement in relation to the services rendered by the assessee. Thus, in respect of the assessment year 1974-75, the sum of Rs. 3,32,481 was paid against delegated invoices and similarly for the next assessment year i.e., 1975-76, the sum of Rs. 67,200 was paid. Certain daily allowances were also paid to the assessee as provided for in the agreement. Other facilities were also made available to him. Before the Income-tax Officer, the assessee had contended that he was exempt from tax. When such a contention was not accepted initially, returns of income-tax for the two years were filed maintaining the contention that he was not taxable. This contention was finally also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal and appears to be the admitted position that Ballarpur were under a legal obligation to pay the tax and had done so. It was also the admitted position between the two sides that Ballarpur could not be regarded as the employers of the assessee. The point dealt with by the Tribunal, which is referred to us for our consideration, is whether the amount of tax paid by Ballarpur under the terms of their agreement with Krebs was taxable under the heading " Income from other sources ". The Tribunal applied its mind to the question whether any sum of money paid by one person on behalf of another to discharge the obligation of the latter could be treated as income accruing to the latter. It referred to the decision if a single judge of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment of tax, it was done by specific provision under the definition as also by provisions under sections 17 and 28 of the Act. In other words, what was submitted was that such a benefit given by the employer would amount to salary and be liable to assessment and payment of tax thereafter by reason of the provision to be found in section 2(24)(iii) read with section 17 of the Act. Similarly, it was argued that such a benefit arising from business or exercise of a profession could be considered as income liable to assessment and tax only by reason of the provision to be found contained in section 2(24)(va) read with section 28(iv). It was submitted that, in the absence of similar provision in section 2(24), such a benefit could not be consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s true that the payment was directly made to the revenue. But to our mind it makes no difference. In Mrs. Roma Bose's case [1974] 95 ITR 299 (Cal), the money was directly collected by means of garnishee orders from parties who were the debtors of the assessee's husband. This was regarded as his income. In our view such payments in our case must constitute income of the assessee. Merely because the inclusive definition of " income " to be found in section 2(24) provides only for the two heads of income, viz., " salaries " dealt with in section 17 and " Profits and gains of business or profession " dealt with in section 28, it would not follow that the benefits or perquisites which are not covered by these two heads of income would not be ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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